[Verse 1]
Portfolio managers wake at dawn
Numbers scattered on their desk
Yesterday's gains could all be gone
VaR helps quantify the risk
It asks one crucial question clear
How much could we lose next week
With confidence levels engineers
Make uncertainty techniques speak
[Chorus]
Value at Risk, VaR for short
Measures potential financial hurt
Ninety-five percent confidence line
Over one day, one week's time
Maximum loss we might expect
When market storms redirect
VaR gives numbers to the fear
Makes the foggy crystal clear
[Verse 2]
Take a million dollar fund
Normal trading, standard day
VaR might say "understand
Fifty thousand could decay"
Not the worst that could occur
Just the threshold we define
Probability's interpreter
Drawing that statistical line
[Chorus]
Value at Risk, VaR for short
Measures potential financial hurt
Ninety-five percent confidence line
Over one day, one week's time
Maximum loss we might expect
When market storms redirect
VaR gives numbers to the fear
Makes the foggy crystal clear
[Bridge]
Five percent of trading days
Losses might exceed this mark
But ninety-five percent obeys
The boundary in the dark
Time horizon, confidence level
These two choices shape the tale
VaR helps institutions settle
How much capital might fail
[Chorus]
Value at Risk, VaR for short
Measures potential financial hurt
Ninety-five percent confidence line
Over one day, one week's time
Maximum loss we might expect
When market storms redirect
VaR gives numbers to the fear
Makes the foggy crystal clear
[Outro]
When volatility runs wild
VaR stands guard with measured might
Turning chaos reconciled
Into quantified insight