Our Approach to Risk

CGOV views risk in a common sense and effective way. While we are aware of the risks that most investment firms manage to, such as position size relative to an index and tracking error, those are not the risks we focus on, nor do we believe our clients focus on as well.

The primary risk we manage is price risk which is a measure of how much upside relative to downside a company has given its current price. These amounts are determined by the best and worst case prices for each company that we independently calculate.

We also manage correlation risk. We understand that in a truly diversified portfolio not all companies’ share prices are moving up and down at the same time. Thus when we add a new company to the portfolio or take one away, we assess how this changes the overall complexion of the portfolio.