Part 2: Measuring Risks

Introduction

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Uncertainty accompanies globalization and technological developments, which can become risks in projects. If modernity occurs, potential risks could produce impacts. For this reason, it is necessary to prevent the occurrence of risks or being prepared with effective risk-mitigating responses if they occur. Notably, for project managers to estimate risk, they have to deploy measures of risk such as standard deviation, beta, value at risk (VaR), and conditional value at risk (CVaR).


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Standard Deviation

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This formula calculates the dispersion of information from its expected value. The standard deviation (SD) is used in making an investment decision to estimate the amount of volatility associated with its rate of return. It indicates how much the current recovery is deviating from its expected standard returns.


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Beta

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Beta is a measure of risk. This formula calculates the amount o systematic risk a project has relative to the whole stock market. The market has a beta of 1, which can gauge the risk of a projectu2019s security. If securityu2019s beta is equal to 1, the securityu2019s price moves in time step with the market. A deposit with a beta greater than 1 indicates that it is more volatile than the market. However, if a securityu2019s beta is less than 1, it means that the security is less volatile than the market.


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Value at Risk (VaR)

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This statistical measure is used to assess the level of risk associated with a project. The VaR calculates the highest potential loss with a group of confidence from a specific period. For instance, if a project portfolio has a one-year 10 percent VaR of $15 million. Therefore, the portfolio has a 10 percent possibility of losing more than $15 million over one year.


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Conditional Value at Risk (CVaR)

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CVaR is another measure employed to assess the tail risk of a project. As an extension of VaR, this formula considers the possibility with a certain level of confidence that there will be a break in the VaR. Further, it aims at what happens to a project beyond its highest loss threshold. Also, this measure is significantly sensitive to events that occur in the tail end of a distribution.

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Emmanuel Addo
Founder
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Emmanuel Addo is the founder of the Young Global Leaders Network, an international non-governmental organization registered in six (6) countries namely, Ghana, United Kingdom, Nigeria, Sierra Leone, Democratic Republic of Congo, and South Sudan and has a membership strength of over 15,000 young black professionals, students, graduates, and aspiring leaders.

The organization also operates in 25 other African countries. Emmanuel also doubles as the chief convener and founder of the Young African Leaders Summit, one of the largest continental youth summits in Africa.  

Currently works at Kingston University as a Business Engagement Team Member in their Partnerships and Engagement Department. 

He characterizes energy, integrity, result-oriented, and ground-breaking service in each detail of strategic management, change management, stakeholder management, and leadership acquaintances.
Emmanuel owns a core background in Sociology and Psychology from the University of Ghana.

Leveraging his experience as a youth activist and a dynamic young man, Emmanuel founded the Young Global Leaders Network, a youth organization that comprises young diplomats, young politicians, and aspiring politicians, business/entrepreneurial business leaders with the aim of championing a mutual agenda for the African youth and promoting youth participation in governance as well as promoting entrepreneurial culture.
Emmanuel nurtures an environment of teamwork and has expertise in data collection and analysis as well as both quantitative and qualitative methods.

Emmanuel worked as an Associate Lecturer at the London College of Advanced Management where he delivered a wide range of business management courses that involved principles of marketing, leadership, operation management, and research methods. Emmanuel has always maintained high teaching and learning standards to ensure that his students’ stand out in academic achievements and successful progression. As a stout believer and passionate key player in volunteering; Emmanuel creates quality time to giving back gladly to his community what he has learned and to educate individuals with free consultancy on career development. He is a leader anyone would love to look up to and with great integrity, commitment, and passion to make the world a better place.
Emmanuel worked as Qualifications Manager at the Open University in the UK.

Emmanuel is also the founder of Kickstart Innovation Hub Ltd, the entrepreneurial hub of Young Global Leaders Network.