Risk Ratio Calculator

WHAT IT DOES This tool provides comprehensive risk analysis for your DeFi positions by calculating key risk metrics including volatility, expected return, maximum drawdown, liquidation distance, Sharpe ratio, Value at Risk (VaR), Conditional VaR (CVaR), and an overall risk score. It reads your wallet balances and positions (optional) and combines them with user-defined parameters—position size, leverage, and risk tolerance—to model the risk profile of your portfolio. The tool simulates price movements and liquidation scenarios based on asset-specific volatility, providing a clear risk assessment with actionable insights. HOW TO USE Connect your EVM wallet using the "Connect" button, or manually enter any wallet address (optional—address is for context only). Select your asset (ETH, WBTC, USDC, DAI, or LINK). Enter your position size in USD, leverage factor (1x to 10x), and risk tolerance (0.0 to 1.0, where 1.0 indicates maximum risk appetite). Select your network and click "Calculate risk ratios" to run the analysis. The tool will display your volatility, expected return, max drawdown, liquidation distance, liquidation price, Sharpe ratio, VaR (95%), CVaR (95%), risk score, and an overall risk level (Low/Medium/High). The risk score and visual indicators help you understand whether your position is within your stated risk tolerance. TECHNICAL MECHANISM The risk engine uses a combination of simulated volatility models and value-at-risk calculations. Base volatility is assigned per asset (ETH ~60%, WBTC ~50%, LINK ~70%, stablecoins ~10%) and multiplied by the leverage factor to produce effective volatility. Expected return is modeled as (0.1–0.3%) × leverage with random variation. Maximum drawdown is estimated as volatility × 2.5 × (1 + (1 - riskTolerance) × 0.5). Liquidation distance is calculated as max(0, 1 - (0.8 / leverage)), with liquidation price set at 100 × (1 - liquidationDistance). Sharpe ratio is computed as expectedReturn / (volatility + epsilon). VaR (95%) is positionSize × volatility × 1.645, and CVaR (95%) is VaR × 1.2. Risk score is a weighted composite: volatility × 50 + (1 - riskTolerance) × 30 + (leverage - 1) × 10, capped at 100. Risk level categories are Low (60). All calculations are live with user-provided parameters. WHAT IT CANNOT SEE The tool cannot view positions on non-EVM chains (e.g., Solana, Bitcoin) or protocols that are not integrated with the tool's data sources. It cannot show real-time pending transactions or mempool activity—only simulated risk metrics are available. It cannot access wallet data without explicit user connection or manual address entry. It cannot detect off-chain holdings or centralized exchange balances. It cannot guarantee risk accuracy due to oracle delays, price volatility, or protocol changes. The simulation does not account for slippage, gas costs, or correlation between assets—all assets are modeled independently. The tool's data sources may have rate limits or require API keys for production use. It does not provide financial advice or guarantee the accuracy of aggregated data. PLEASE NOTE This tool is for informational and simulation purposes only and is not financial advice. Risk metrics are estimates based on simplified models and may not reflect actual market behavior. Always verify your positions and risk exposure directly on-chain before making any decisions. The tool's data sources are subject to rate limits and availability. This tool only works with EVM-compatible chains. Use at your own risk.