The downside risk value of the fund refers to the risk that the future stock price trend may be lower than the target price expected by analysts or investors.

data expansion:

1. Defining downside risk means that the future price trend may be lower than the target price expected by analysts or investors due to changes in the market environment. Downside risk is the worst possible situation for our investment, and it is also the loss that investors may have to bear. The downside risks of different investments are different, some are small, while others may be infinite.

For example, buying stocks requires limited downside risks, and the worst result is that investors lose all the investment costs, that is, the principal. However, the downside risk of short selling operation is infinite, because the rising space of the short-selling stock price is infinite.

Second, investment application:

Unlike when emphasizing the upward risk, analysts or investors may be conservative in their judgment and the corresponding target price, emphasizing the downward risk is usually due to insufficient information on the target price. Most of them happen when the whole stock market is in a downturn and may continue to fall, and when the company and its industry have great negative uncertainty, the government may introduce policies to curb the development of a certain industry, but the time has not yet been determined.

at this time, even if the analysts and investors are reasonable and correct in predicting the company's performance and judging the stock price, once these negative uncertainties come true, the target price will no longer be applicable. In a bull market, analysts and investors pay more attention to the upward risk, while in a bear market or market fluctuation, the downward risk is likely to appear.

Reference: Downside Risk-Baidu Encyclopedia