1. Variance-covariance method: This method uses statistical analysis to analyze the correlation and difference between asset price fluctuations, thus measuring the risk of market fluctuations.
2. Historical simulation method: Based on the data of asset price changes in historical period, this method evaluates market risk by calculating volatility and risk value. The disadvantage of this method is that the future market may be different from history.
3. Monte Carlo method: This method uses random numbers to simulate future market fluctuations, thus obtaining future risk values. This method can better reflect the uncertainty of the future market.
4.GARCH model: GARCH model is a method based on time series analysis, which can identify the change of market fluctuation and its relationship with time and other market factors, so as to predict market risks more accurately.
Through the above methods, we can get a statistical risk value to evaluate the market risk. Of course, for different investors or investment strategies, the definition and evaluation of risk are also different.