Long-tail risk

The risk of rare events with outsized consequences, the outcomes that sit at the far ends of a return distribution. They are easy to underestimate because they appear infrequently in historical data.

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Related terms

Risk measures

• Active tail hedging
• Conditional value at risk
• Customer acquisition cost
• Fat tails
• Regulatory compliance
• Risk management
• Skewness
• Stress testing
• Tail-risk diversifiers
• Value at risk