The probabilistic scenarios methodology is internationally used to measure risks.
It ’s an instrument clearly understandable because give the chances of getting a positive or negative result.
The probabilistic scenarios are the core of the eKuota risk model.
The underlying model of the eKuota risk engine is the “Parallel Filtered Bootstrap”, a complex probabilistic model that takes into account all risk exposures and enables the generation of scenarios for each relevant time horizon.
It’s a risk engine that produces accurate and reasonable scenarios that are able to capture correctly market movements and to produce reliable estimates. Without using preset probability of distributions we obtain a multivariate empirical distribution.
The essence of the risk measurement is to represent a realistic view of what might happen in the future and in particular, in the case of a non financial companies, of what might happen to the cash flows.
The eKuota probabilistic scenario explores the value of the cash flow at year end. It ’s an immediate and intuitive graphical representation of the company’s risks.