In brief
- Synthetic portfolio-risk evaluation.
- 5 factors combined by the backend.
- Exposed in the Portfolio module, in the Risk Score widget and at the DeFi protocol level.
- Computed on the backend with caching (not real-time): it's a stable metric, not a value that changes every second.
- Not a forecast: it's a measure of the portfolio's current state.
In depth
The five factors
The five factors feeding into the Risk Score are:
- Concentration — how concentrated the portfolio is on few assets. A portfolio with 90% in a single asset is penalized vs a more distributed one.
- Correlation — how correlated assets are with each other. Ten assets all 95% correlated to BTC isn't diversification: the correlation factor penalizes "looks diversified but it's the same bet" portfolios.
- Volatility — aggregate portfolio volatility, computed on the historical returns of held assets.
- Drawdown — historical portfolio drawdown, i.e. how far it fell peak-to-trough.
- Market risk — an overall market-risk factor, accounting for general context.
How it's computed
The Risk Score is computed on the backend and exposed to the frontend via API. For efficiency, the response is cached with a short TTL (a few dozen seconds), so it isn't strictly real-time: it's meant to be stable, so you don't see the number bounce constantly but represent portfolio state over meaningful time windows.
One consequence: if you make a large portfolio change (e.g. a significant trade), the risk score may update with a few seconds of delay.
Where you see it
- In the Portfolio module, as a dedicated card.
- As an alert in the notifications system (if enabled).
- In the DeFi module, where each protocol has its own risk score (different: it's protocol risk, not portfolio risk).
How to read it
A high risk score doesn't mean "sell everything". It means that, according to the backend's factors, your portfolio is in a higher-risk zone. It's an invitation to check whether the risk is intentional:
- You're overweight a volatile asset by conviction → ok, you know what you're doing.
- You're accumulating correlations and concentrations without noticing → time to review allocations.
How to influence the score
To lower the risk score:
- Reduce concentration (general rule: no more than 30–40% in a single asset).
- Diversify toward less correlated assets.
- Limit exposure to very volatile assets.
- Keep a stablecoin/BTC buffer.
If the risk score is too low and you want more conscious upside, you can raise exposure to higher-volatility assets — but in a controlled way.
Limits
- The Risk Score is derived from the tracked portfolio data. If part of your wealth isn't connected to Saturia, the number is only partial.
- It doesn't consider your total external capital (salary, house, stocks off-Saturia). A high risk score on €1,000 is different from one on €500,000.
- It doesn't replace a financial advisor.
- Tail shocks (hacks, depegs, geopolitical events) aren't captured by this kind of metric.
Evolution
The Risk Score math is maintained by the team and can be refined over time. If you notice meaningful discrepancies between what you see and what you'd expect, contact support: feedback helps improve the model.