Barra Global Equity Risk Model
Build superior equity portfolios by providing a clear view of the sources of risk and return.

Stock movements are influenced by various common factors. These factors allow a portfolio's risk to be predicted and decomposed into meaningful terms. Barra's multiple-factor risk models compute an asset's sensitivities to factors such as industry groups, market characteristics and fundamental data.

Barra's Global Equity Risk Model extends these concepts to the international equity markets. Through rigorous research, Barra has isolated the factors that uncover the risks associated with global equity portfolios. These are country, industry, style and currency factors.

Barra's Global Equity Risk Model not only forecasts risk, but also provides a clear dimensionalized view of the sources of risk unique to multiple-country investing. By attributing risk to its common factor sources, managers can act to magnify or neutralize exposure according to their judgement and insight.

Benefits

Coupled with the Barra Aegis System, Barra's Global Equity Risk Model provides performance-enhancing benefits:

	Quantify risk and isolate its common-factor and asset-specific sources.
	Construct optimal portfolios and trade scenarios.
	Evaluate performance by isolating drivers of volatility.
	Compute predicted portfolio active risk versus any benchmark.
	Create superior index portfolios which track indexes with fewer stocks and lower transaction costs.
	Use "what if" scenarios and marginal analysis to evaluate risk/return tradeoffs before trading.
	Develop active "tilt" strategies using common factors.

View Barra Global Equity Risk Model asset coverage