Building a Resilient Portfolio with Company Risk Insights from Riskify

21 Feb 2025

By Riskify

Building a Resilient Portfolio with Company Risk Insights from Riskify

Investment management has been an ever-changing landscape, where creating a durable portfolio necessitates more than a mere focus on financial indicators. It requires complete ascertainment of business risk, strategic allocation of assets, and the incorporation of non-financial risk measures including environmental, social, and governance (ESG) factors. That's where solutions like Riskify come in, offering valuable risk insights that help investors and compliance professionals make better decisions. In this article, we will explain how Riskify can help you build an investment strategy that is sustainable.



This is how we refer to management of a resilient portfolio

A resilient portfolio is an investment strategy and management approach that is designed to withstand crises, market volatility, and economic downturn. This requires a fine-tuning of the risk-to-reward ratios within investment portfolios to guarantee profitability in the face of emerging threats. A robust portfolio buffers a market slump, experiencing steady growth as it weathers the economic storm.
These portfolio components embrace multiple strategies and attitudes that extend beyond the boundaries of profit margins. Investors need to constantly research and analyze the possible weaknesses in their portfolio. This includes analyzing economic indicators and political climates-and even global events that could influence market conditions. That's why, by identifying these factors, investors can position their portfolios ahead to navigate uncertainty and capitalise on opportunities as they appear.

Strategic Asset Allocation
Quite simply, strategic asset allocation forms the bedrock of resilient portfolio management. This means spreading your investments across different asset classes to reduce risk and increase returns. Investors can protect their portfolios from the adverse effects of market volatility by spreading investments across stocks, bonds, real estate, and other assets. This approach minimizes the effect of poor performance in one asset, as the benefits of growth in other areas can mitigate the losses.

In addition, strategic asset allocation is an ongoing process, needing periodic review and adjustment to conform with changing market conditions and investment objectives. Changes in the economy, interest rates, or new investment products may require you to adjust the distribution of your assets. Real-time insight on these factors is where tools such as Riskify come into play, providing investors a real-time view of how to optimize the timing of relevant portfolio strategies such as rebalancing their portfolio.

Company Risk Evaluation
Company risk is key for assessing the long term sustainability of investments. Among them is assessing financial risk, operational risk and compliance risk and others. Financial risk refers to the risk of losing money because of the way of the company structure financially, while operational risk refers to the company's internal processes and systems. Compliance is more closely connected to laws and regulations that the business needed to follow.
Services like Riskify deliver deep visibility into these risk factors, empowering investors with the information necessary to make informed investment decisions. Advanced analytics helps investors assess the potential consequences of such risks on their investments. By taking the time to understand the risks associated with their investments, investors can make more informed decisions that ultimately lead to a more secure and profitable portfolio.

Integration of ESG Factors
Adding ESG factors to investment strategies is for many investors a growing factor. Environmental, Social and Governance (ESG) factors can impact a companies performance and therefore the value of investments. Environmental refers to a company's effect on natural resources and climate change. Social factors are those related to labor practices, community impact, and employee relations, and governance factors include corporate policies, leadership, and internal controls.
Assessing a company's ESG performance helps investors to construct their portfolios in-line with sustainability and ethics. This strategy not only bolsters responsible investing but also capitalizes on increasing consumer demand for companies that value sustainability. Increased Focus on ESG: As investors and other stakeholders increasingly focus on ESG issues, companies with strong ESG practices are likely to see improved reputation and financial performance, which will benefit those investors who factor such issues into their investment decisions.



Get Riskify: Portfolio Management

Riskify: A new, modern tool for rigorous risk insights to drive resilient portfolio management. It contains a set of features for detecting and analyzing risk factors that that might otherwise be overlooked. Here's how it can future-proof investors and compliance officers:

Detailed Risk Insights
It provides a number of different types of company risk information such as financial, operational, compliance risks, etc. Through studying these components, investors will recognize possible risks and prospects that lead them to make good investment decisions. Such an in-depth analysis can reveal weaknesses in a company's operations or financial health that may present risks down the road.
Furthermore, Riskify features predictive modelling, which can project out potential risk situations and their consequences. This combination empowers investors to test their portfolios over various hypothetical scenarios, making their planning and decision-making more strategic than before. Such a proactive risk management strategy is necessary in today's dynamic market environment.

Real-Time Data and Trends
Access to real-time data is critical in any industry, especially in today's fast-paced market. Riskify alerts risk factors in the competitors, news in the industry, and market trends. This enables investors to be proactive and adapt their strategies accordingly. Real-time alerts allow investors to react timely whenever there is any change in the market and thus reduce their losses.
Real-time data also encourages better collaboration and decision-making within investment teams. Having access to real-time information fosters better collaboration, insight sharing and strategy alignment among the teams. Collective success is the primary objective of them all, reinforced by the unified objective of resilience, as owners and other stakeholders are kept in the loop and can be part of the success of the portfolio via data upto oct-23.

ESG Performance Evaluation
As sustainability becomes an ever bigger focus, Riskify analyzes a company's ESG (environmental, social and governance) performance, helping consumers to understand how a business' practices may affect their investments. This ensures portfolio alignment with ethical and sustainable practices, thus adding long-term value. Riskify's ESG assessment also offers benchmarking against industry peers, providing investors with an insight on how a company's ESG performance measures against its competitors.

Moreover, integrating ESG measures into the investment research process can reveal hidden risk exposure or opportunities that may be missed through purely financial analysis. Strong ESG practices can reflect better risk management, operational efficiencies, and regulatory compliance, leading to long-term stability and profitability for good companies. Riskify Data empowers investors to consider these aspects in their decisions ensuring they take a balanced view over portfolio decisions.

Following the path we plot with Riskify to shape an investment strategy

Riskify can help with each step of this process: It needs a methodical way of reviewing, modifying, and observing investments in order to reach lasting success.

Step 1: Call a spade a spade
Look at the current portfolio allocation first. Asset allocation, company risk exposure & ESG alignment There is a need for risk archetypes, but how to start? Riskify can help by showing a holistic view on existing investments with strong and weak areas. This evaluation lays the groundwork for strategic planning, determining which assets align with your objectives and which ones need to be reconsidered.
Moreover, knowing the risk profile of the current portfolio helps investors pinpoint potential gaps or concentrations that would be risky. Riskify's insights allow investors to quantify these risks to know how much to adjust their portfolios toward greater diversification and resilience. Staring at these thoughts, this is a very important step for future portfolio development direction.

Step 2: Recognize Potential Risks and Opportunities
Step 5: Apply Riskify's Analysis to the Portfolio This also means the plan should cover market signals, competitor actions, and non-financial risk factors like ESG performance. Understanding these factors enables investors to anticipate changes and adjust their strategies before they react.
This step also includes scenario analysis, where investors look at different market scenarios and how they may affect the portfolio. Modeling different "what-if" scenarios helps investors be better prepared for possible outcomes, as well as better positioned to take advantage of opportunities and mitigate risks. However, in this regard, Riskify's predictive analytics offer valuable support using data-driven predictions.

Step 3: Change Asset Allocation
Recalibrate asset allocation based on the history based on the insights. Invest in a variety of human and physical resources in an attempt to minimize risk and hedge against uncertainty. This transition theory should take into account both the immediate market circumstances and the long-term competitive strategy.
The task of rebalancing the portfolio is not a one-time activity but an act that goes hand in hand with investor vigilance and adaptability. In conjunction with changing market dynamics, asset allocation should also be flexible. Evaluating and rebalancing your portfolio regularly can keep it in line with your risk and investment objectives so that performance is optimal over time.

Step 4: Monitor and Adjust
It never ends, though -- portfolio management is an active and ongoing process. Use Riskify's real time data and insights to monitor portfolio performance over time. Adjust as needed to remain consistent with investment objectives and market conditions. With continuous monitoring, the investor is able to manage emerging risk or opportunity with agility while ensuring that the portfolio remains resilient.
Plus it allows investors to track their strategies and make data-driven decisions due to constant monitoring. Riskify's live insights allow investors to take a kinetic, adaptive approach to portfolio management, one which continuously adjusts to the dynamics of the marketplace and investor goals. A proactive approach is crucial for building lasting success while the market remains in flux.



Why Compliance is a Fundamental Pillar of Investment Management

For investment management compliance officers, ensuring compliance with regulations and company policies is top of mind. This involves compliance with frameworks like SOC 2, ISO 27001, HIPAA, and PCI DSS. There is more to compliance than ensuring one is not subject to penalties from the law, as the trust built with stakeholders, varying from regulators to investors and customers alike, adds to profitability in the long run.
Compliance risk can be minimized for these companies and their portfolios can be protected from potential legal and financial repercussions by integrating compliance management systems within the investment strategy. Such compliance frameworks not only establish trust but also improve operational efficiency by automating processes, minimizing errors, and boosting the productivity of employees. Being up-to-date with the regulatory landscape can even help in staying a step ahead of competition and being perceived as a company that adheres with the best ethical practices and regulatory requirements.

How Riskify Streamlined Compliance Requirements
Riskify's granular risk insights help simplify compliance process as well. Through a clear breakdown of company risk factors, compliance officers can help investors avoid potential pitfalls and ensure that investments meet regulatory and industry standards. By minimizing the risk of non-compliance through this alignment process, your organization will avoid costly fines and reputational damage.
Here it is: Additionally, the insights from Riskify can also help automate compliance reporting and monitoring efficiently. Riskify empowers compliance officers to shift their focus from rote processes to strategic initiatives by automating their collection and analysis of compliance data. This drives the organization to respond to regulatory changes in real time, which is a key factor in protecting the integrity of the portfolio.

Conclusion

As markets constantly grow complex & volatile, it takes way more than financial awareness to build a resilient portfolio. It requires a comprehensive knowledge of corporate risk, strategic asset allocation, and incorporating non-traditional, non-financial elements of non-financial ESG into risk assessments. To tackle these challenges, tools such as Riskify show the required insights to the investor and compliance officer, allowing them to build strong and sustainable investment plans. By using risk intelligence, you can better protect your portfolio and your financial future with Riskify.
Trained on data until October 2023. With the ongoing evolution in the investment space, we believe that users of tools like Riskify that provide comprehensive risk management will be set up to succeed, generating profits while helping to build a more sustainable and value-aligned economy.

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