Visualising Risk

Risk Managers need to analyse and make decisions on data that changes at least daily. Each day trading and risk systems generate huge volume of data – millions, perhaps billions of rows. There is lot a variety within this deluge of data including trades, positions, sensitivities, prices and risk results such as value-at-risk (VaR). Reference data such as bank’s hierarchy, counterparty details, instrument details, countries, currencies are also required.

Dashboards and visualisations are essential to make sense of this. A good visualisation will provide a top-level view to bring out the big picture and overall trends, and highlight any outliers or exceptions that need attention. The best visualisations will then allow risk managers to drill down to the detail.

The next series of blogs will describe useful visualisations for showing certain aspects of risk and explain what features make them helpful. We will look at
• Tree maps for visualising VaR
• Mechanisms to drill down a firm’s hierarchy
• Bullet charts for comparing risk usage against limits
• Line charts to show P&L history and other time series