Adjust size for volatility, liquidity, events, and correlation.
| Concept | Explanation | |---|---| | Fixed-percent risk | Risk a consistent percentage of portfolio value. | | Volatility-adjusted risk | Reduce size when the asset's normal price movement is larger. | | Liquidity-adjusted risk | Reduce size when exit capacity is limited. | | Event-adjusted risk | Reduce size before earnings, unlocks, policy events, or litigation outcomes. | | Correlation-adjusted risk | Reduce size when the portfolio already holds similar exposures. |