While Riskalyze no longer supports an integration with HiddenLevers, we recognize that our advisors may continue to use their risk scoring and want to compare results between the two.

**Please note**: Riskalyze and HiddenLevers measure risk in significantly different ways. HiddenLevers Risk Tolerance score measures the maximum drawdown a client/prospect is comfortable experiencing before needing to see a recovery. Riskalyze looks at the 6-month 95% probable downside. This means that the potential loss number Riskalyze sends over under represents the potential loss the client/prospect may experience.

For example, let’s look at a client with a Riskalyze Risk Number of 70:

We can see that they have a 6-month potential loss of 15%. This is what you may want to put in HiddenLevers as the risk score, but it is not the same measurement.

If we look at a model with a Risk Number of 70 in Riskalyze, we see what this means:

So, a portfolio with a Risk Number of 70 has a 6-month potential downside of 15.1%. However, if the Financial Crisis were to happen today, the portfolio would be down 50.6%. In HiddenLevers, our Risk Tolerance focuses on this max drawdown possible in a black swan event. And the same portfolio in HiddenLevers shows a stress test risk of 45.6% down for a repeat of the Financial Crisis.

Unfortunately, there isn’t a clear translation of the Riskalyze Risk Number into a HiddenLevers Risk Tolerance score. Generally, it’s safe to take the 6-month downside shown in Riskalyze and multiply by 3x to get the approximate HiddenLevers Risk Tolerance score. So, for the example above the client with a Risk Number of 70, which has a 15% 6-month loss chance, would translate to 45% down in HiddenLevers. Please note that Riskalyze risk numbers follow a standard statistical distribution. This means that scores of ~75 or higher will translate to the largest loss tolerance number in HiddenLevers, 50%.