A value investing strategy seeks to invest in undervalued companies. To identify such stocks, analysts can, for instance, select firms with low price to earnings ratios (stock price divided by earnings per share) or low price to book ratios (stock price divided by book value per share). While proponents of this approach believe such companies will see their stocks increase toward their intrinsic value, critics believe that this intrinsic value is more difficult to assess. Value investing is often opposed to growth investing.
The VaR is the maximum amount that can be lost in a portfolio over a period of time and with a given level of confidence. As an example, a VaR at EUR 1 million means that in 99% of the cases, the portfolio should not lose more than 1 million EUR over the next 10 days. Introduced at end of the 1980s, VaR is today the most commonly used indicator to measure portfolio risk.
The volatility of an asset is the standard deviation of its returns. As a measure of dispersion, it evaluates the uncertainty of asset prices, often described as its risk. Volatilities can be calculated ex-post (retrospectively) or estimated ex-ante.
Volume-weighted average price (VWAP)
The volume-weighted average price (VWAP) is the ratio of the total value traded to the total volume traded during a given period. Lots of brokers are assessed for their capacity to execute orders at prices which are equal or better than the VWAP.