How to Calculate Value at Risk (VaR) Using Excel || Value at Risk Explained

@MattMacarty 
**Master the calculation of Value at Risk (VaR), the essential statistical measure of downside risk.** In this advanced financial modeling tutorial, we demonstrate the **Parametric VaR** method using the Normal Distribution to estimate the maximum potential loss over a specific time horizon and confidence level.

We cover both single-security VaR and the more complex multi-asset VaR, using portfolio volatility as the core input.

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### ⏱️ Video Chapters / Timestamps

0:00 - Introduction: What is Value at Risk (VaR)?
0:31 - Non-Parametric vs. Parametric VaR methods
1:00 - The required inputs: Portfolio Value, Volatility, Time Horizon, and Confidence Level
1:47 - The problem with VaR: What happens beyond the confidence level?
2:42 - **Example 1: Single-Security VaR (Apple)**
3:30 - Using the **`NORMS.INV`** function to find the confidence Z-score (2.33 standard deviations)
4:05 - Calculating Single-Day and Multi-Day VaR
5:15 - **Example 2: Multi-Security VaR (Apple & Gold)**
5:46 - Calculating Portfolio Volatility for two securities (Manual formula)
6:55 - The full portfolio volatility formula explained
7:35 - Risk reduction benefits from diversification
7:52 - Final Multi-Asset VaR Calculation
8:45 - The need for Matrix Math in larger portfolios (10+ assets)

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### 🔎 Summary of Skills Learned

* **Theory:** Understand the statistical assumptions of Parametric VaR (Normal Distribution).
* **Functions:** Learn to use the `NORMS.INV` function in conjunction with the standard deviation.
* **Application:** Calculate a 99% confidence VaR for both a single stock and a diversified portfolio, while correctly adjusting the volatility for the time horizon using the square root rule [04:17].

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