What would a market drop do to your portfolio?
A portfolio that has only lived through calm markets has never been tested. Tradune applies a market shock or a rate hike you choose to your current holdings and estimates the dollar loss for each position, so “how bad could it get?” becomes a number you can look at.
One volatility number hides the tail
A single risk figure is abstract and treats an up-surprise the same as a crash. What you actually want to know is what a specific bad scenario would do to your balance — in dollars, position by position, and which holdings would do most of the falling.
A market shock, scaled by each holding’s beta
Pick a market decline from 1% to 80%, or a preset: a 10% correction, a 20% bear market or a 35% crash. Each position’s estimated move is its beta times the shock, so a high-beta stock is hit harder than a defensive one, and the results are sorted so the biggest dollar losses come first.
A rate-hike scenario by sector
Pick a rate increase from 25 to 500 basis points. Each position is scaled by an illustrative sensitivity for its sector — highest for utilities and real estate, lowest for financials — and the page breaks the estimated loss down by sector. The sensitivities are labelled illustrative because they are not calibrated to past rate cycles.
Honest about the limits
Both scenarios are linear sketches. In a real sell-off, correlations rise and diversification thins out exactly when you need it, betas change, and some holdings move for reasons a single market factor never captures. A stress test is a fire drill, not a forecast, and Tradune presents it without false precision.
How is the stress-test loss calculated?
The arithmetic is deliberately simple, so you can redo it by hand. For what beta measures and where it misleads, read VaR, beta and drawdown, explained.
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Current positions at the latest price
Shares are rebuilt from the buys, sells and splits you recorded, then valued at the latest stored quote. Cash rows are not holdings and are not shocked.
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A beta for each holding
Beta comes from the market-data row the app refreshes for each symbol. If that row is out of date it falls back to the provider’s fundamentals, ignoring implausible values; if neither has a beta — common for ETFs — the holding is treated as beta 1.0, moving one-for-one with the market.
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Market shock: beta × shock
A stock with beta 1.3 in a 20% market drop is estimated to fall 26%. The dollar loss is that percentage of the position’s current value.
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Rate hike: sector sensitivity × hike
Sensitivities run from 1.5 for utilities and 1.3 for real estate down to 0.3 for financials, with 0.8 when the sector is unknown. A 1-point hike on a utility position is an estimated 1.5% loss.
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A cap at 100%
A long position without leverage cannot lose more than the money in it, so any estimate above 100% is capped there; a capped row is marked with an asterisk, and the uncapped model figure appears on hover. The portfolio total is the sum of the position losses, as a share of the positions’ value.
What does a 20% market drop look like on a real-sized portfolio?
A hypothetical $100,000 portfolio of four holdings under the −20% bear-market preset.
| Holding | Value | Beta | Estimated move | Estimated loss |
|---|---|---|---|---|
| Stock A | $40,000 | 1.3 | −26% | −$10,400 |
| Stock B | $30,000 | 0.9 | −18% | −$5,400 |
| Fund C (no beta available) | $20,000 | 1.0 | −20% | −$4,000 |
| Stock D | $10,000 | 4.5 | −90% | −$9,000 |
| Portfolio | $100,000 | 1.44 weighted | −28.8% | −$28,800 |
The book falls 1.44 times the market because its value-weighted beta is 1.44 — and Stock D, a tenth of the money, produces almost a third of the estimated loss.
Under the −35% preset, Stock D’s model move would be 4.5 × 35% = 157.5%. Tradune caps it at a 100% loss ($10,000) and shows the uncapped figure next to it.
What you get
- Market shock from 1% to 80%, with −10%, −20% and −35% presets
- Rate-hike scenario from 25 to 500 basis points, by sector
- Estimated dollar loss per position, sorted, plus loss by sector
- Beta per holding, with 1.0 used when none is available
- Per-position loss capped at 100% of its value
- An exposure sketch, not a forecast
Frequently asked
What does a stress test show?
It estimates how your current holdings would move if the market fell by an amount you choose, or if rates rose. It makes tail risk concrete and personal rather than abstract.
Does it replay 2008 or the 2020 crash?
No. Tradune does not replay historical crisis periods. It applies a hypothetical shock you choose through each holding’s beta or sector sensitivity. The −10%, −20% and −35% presets are round severities, not reconstructions of a particular year.
Is it predicting a crash?
No. A stress test carries no probability — it says “if this happened, here’s the mechanical result.” It never claims a crash is coming or likely.
How does beta scaling work?
Estimated move = beta × market move. A beta of 1.3 in a −30% market implies about −39%. It’s a simple, transparent approximation, not a guarantee, and real betas change in a crisis.
Where do the rate-hike sensitivities come from?
They are fixed, illustrative values per sector set in the app, not estimates fitted to past rate cycles, and the page says so. Use the rate-hike view to see which sectors you are concentrated in, not as a precise loss figure.
Is this advice?
No. It’s educational risk analysis, not a recommendation, forecast, or instruction to trade.
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