Since it is continually monitored and optimised, the portfolio continually matches your risk profile.
The Robo-Advisor assesses the market risk to which a portfolio is exposed by considering the average loss that the investor is willing to suffer over an investment horizon of a week, with a probability of 5%.
This measure, known as the Conditional Value at Risk, is freely determined on a scale from 1 to 10 and may be changed at any time. When the portfolio is developed, the algorithm looks for the combination that offers the best expected return for the chosen level of risk.
When the strategy is implemented, the algorithm continually compares the level of risk that you have chosen with the actual market risk. If the characteristics of a security change in a manner that causes the portfolio’s overall level of risk to exceed the level you have chosen, the security is sold to bring the portfolio back within the chosen risk limits.