Var model is a mathematical model used to describe the risk degree of assets. It is the abbreviation of VaR(Value at Risk) and is a common method in the field of financial risk management. This model can be used to evaluate the risks of different types of investment portfolios and financial instruments and help enterprises or institutions to formulate risk management strategies.

Var model mainly evaluates the risk of securities trading by calculating the expected loss and guarantee level. Expected loss refers to the possible loss caused by market price fluctuation in a certain period of time. The level of security refers to the biggest loss that the stock exchange bears in a specific period. Through this model, we can know the profit and loss of the portfolio in time and manage the risk effectively.

In practice, var model can not only help banks and insurance companies control risks, but also be applied to other fields. For example, in the field of international trade, var model can effectively manage the company's cash flow, thus improving the operational efficiency and effectiveness. At the same time, it can also help personal finance. Investors can predict investment risks through the var model, and then make appropriate investment plans.