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The Management of Portfolio Risk on the Romanian Capital Market

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  • Dalia Simion
  • Daniel Toba

Abstract

In a society strongly dependent and intensively industrialized such like the one we live in, risk cannot be an isolated event, but the consequence of some facts that determine its transfer from one point of the planet to another. As a result to the general tendency of increasing the volatility of the financial markets but also to the increasing complexity of the global financial system there was registered a continuous interest in the domain of risk management. Within the article there are being presented methods of reducing risk for financial titles portfolio, coming to support the investors that want a greater security when making the portfolio. We will further present the way in which diversity can reduce risk, but at the same time in order to better understand the complete effect of diversity we will show the way in which a portfolio risk depends on an individual risk of each component title, exemplifying some titles quoted at Bucharest Stock Exchange.

Suggested Citation

  • Dalia Simion & Daniel Toba, 2007. "The Management of Portfolio Risk on the Romanian Capital Market," European Research Studies Journal, European Research Studies Journal, vol. 0(3-4), pages 73-80.
    • Handle: RePEc:ers:journl:v:x:y:2007:i:3-4:p:73-80
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    References listed on IDEAS

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    1. Peter Bank & Dietmar Baum, 2004. "Hedging and Portfolio Optimization in Financial Markets with a Large Trader," Mathematical Finance, Wiley Blackwell, vol. 14(1), pages 1-18, January.
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