Capacity for Loss
This API forms part of the Capacity for Loss journey alongside our Risk Questionnaire Profiler and Investment Forecast APIs. It forecasts all of the risk profiles and returns the highest risk which satisfies the given likelihood of meeting a target. Reducing the percentile option would represent a lower capacity for loss due to a higher certainty being required to achieve the target. Our example below of the 5th percentile means that 95% of the results must exceed the target.
Try it out
The API store provides How-To guides that show examples and a possible use case for each API. This example has been adapted from the Capacity for Loss How-To Guide.
Bob has been risk rated as a highly adventurous investor, 5 on EV's 5-risk scale. However, he is keen to avoid the downsides that investing can bring and therefore wants a minimum return of £14,500 on his £15,000 investment over 10 years. EV's Capacity for loss API calculates that Bob should invest in a risk level 3 in order to ensure that he has a 90% chance of exceeding his minimum return.
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