# Portfolio Risk Analysis

## 🎯 Risk Score Components

### 1. Market Cap Exposure

We analyze your portfolio's distribution across different market cap segments:

* Top 3: Very Low Risk (15 points)
* Top 4-10: Low Risk (25 points)
* Top 11-50: Medium Risk (50 points)
* Below 50: High Risk (75 points)

### 2. Concentration Risk

* Top 3 tokens: Only penalized above 40% allocation
* Other tokens: Penalized above 20% allocation

### 3. Diversification Assessment

Calculated based on:

* Number of different assets in your portfolio
* Distribution across market cap categories
* Balance between different cryptocurrencies

**Diversification Status Categories:**

* Excellent Diversification (80-100): Well-balanced portfolio with optimal asset distribution
* Good Diversification (60-79): Solid mix of assets with room for minor improvements
* Moderate Diversification (40-59): Some concentration risks present
* Poor Diversification (0-39): High concentration risk, needs rebalancing

### 4. Volatility Assessment

Measures the price stability of your holdings on a 0-10 scale:

**Volatility Status Categories:**

* Very Low Volatility (0-2.5): Minimal price fluctuations
* Low Volatility (2.6-5.0): Moderate price stability
* Moderate Volatility (5.1-7.5): Notable price movements
* High Volatility (7.6-10): Significant price swings

### 📊 Risk Categories

Your overall portfolio risk is classified into:

* Very Low Risk (0-25)
* Low Risk (26-50)
* Moderate Risk (51-75)
* High Risk (76-100)

### 🔍 Risk Score Calculation

The final risk score (0-100) is calculated by combining:

* 30% weight: Diversification score
* 70% weight: Risk factors (market cap ranking, concentration, volatility)

Lower scores indicate a more conservative, potentially safer portfolio.

### 💡 Recommendations

Based on your portfolio analysis, you'll receive personalized recommendations for:

* Improving diversification
* Reducing concentration risks
* Balancing market cap exposure
* Managing volatility

### ⚠️ Important Notes

* Risk scores are indicators, not investment advice
* Market conditions can change rapidly
* Past performance doesn't guarantee future results
* Consider your personal risk tolerance when making investment decisions