Regression model

Value-at-Risk (VaR) Backtesting

VaR backtesting is a family of statistical tests that validate a risk model by comparing its Value-at-Risk forecasts against realised losses. It builds on Kupiec's (1995) unconditional coverage test, Christoffersen's (1998) conditional coverage test, and the Engle-Manganelli Dynamic Quantile (DQ) test.

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Sources

  1. Kupiec, P. H. (1995). Techniques for Verifying the Accuracy of Risk Measurement Models. The Journal of Derivatives, 3(2), 73-84. DOI: 10.3905/jod.1995.407942
  2. Christoffersen, P. F. (1998). Evaluating Interval Forecasts. International Economic Review, 39(4), 841-862. DOI: 10.2307/2527341

Related methods

Referenced by

ScholarGateVaR Backtesting (Value-at-Risk Backtesting (Kupiec, Christoffersen, Dynamic Quantile)). Retrieved 2026-06-04 from https://scholargate.app/tr/finance/backtesting-var