Risk analysis is the study of the underlying uncertainty of a given course of action and refers to the uncertainty of forecasted cash flow streams, the variance of portfolio or stock returns, the probability of a project’s success or failure, and possible future economic states. Financial risk analysts are employed by companies to identify and scrutinise possible risks that may have an impact on the financial success of their business. Financial risk analysts are responsible for recommending measures to mitigate risks, primarily including four types which are credit risk, regulatory risk, operational risk and market risk, predicting change and future trends as well as forecasting cost.
A financial risk analyst will make recommendations on risk coverage, developing strategies to minimise risks and maximise rewards, and making sure that the company complies with financial regulations and other statutory requirements.
Furthermore, they will research current and future events and anticipating their possible effect on the economy, the financial services industry and the stability of financial institutions. Thus, financial risk analysis is a critical link to the lifecycle of financial services.
Quantitative analysis, statistical models and valuation tools and techniques are used in the daily work of a financial risk analyst. They will also analyse research data by reviewing financial and accounting documents, industry developments and other resources.
Cedrus Investments, a global boutique investment firm headquartered in Hong Kong, offers a full suite of complementary financial advisory services to select corporations and governments, including risk management. Under the guidance of Mr. Rani Jarkas, an elite financial services executive who founded the firm more than 18 years ago, Cedrus has extensive experiences in enhancing corporate value along with market dynamics.
Being a part of its strong governance framework, Cedrus has established an Investment Committee comprising of the firm’s senior portfolio managers, analysts, economists, accountants and compliance advisors. The Investment Committee is responsible for evaluating all risk parameters and overseeing all investment decisions.