Risk ratio


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Risk Ratio

An analysts' estimate of the likelihood that a security will increase or decrease in price by a certain amount. For example, if a security currently trades at $50, but an analyst believes it could increase $30 but could also decrease $10, the security is said to have a risk ratio of 3:1.

Risk ratio.

Some investors and financial analysts try to estimate the risk an investment poses by speculating on how much the investment is likely to increase in value as opposed to how much it could decline.

For example, a stock priced at $50 that analysts think could increase to $90 or decrease to $30 has a 4:2 risk ratio, because they estimate the stock could go up $40 but down $20.

Critics point out that it is impossible to provide an accurate estimate of future prices, rendering risk ratios meaningless.

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References in periodicals archive ?
Risk ratios are frequently relied upon to establish fact probabilities.
If all such studies reported cutoff points, risk ratios, prevalence rates of abnormal values, precise definition of methods, and the interpretation criteria, then a rational assignment of priority might be possible.
The age-adjusted rates for cancer incidence, on the other hand, show that the Relative Risk Ratio of Jews to Arabs is higher than the Relative Risk Ratio for cancer mortality, indicating less early detection among Arabs than Jews (ICDC, 1997: 82).
It is also proposed to establish a reduced risk ratio of 85% for requirements for small and medium-sized businesses that are evaluated on an individual basis (a risk factor of 100% is currently applied) if the requirements for these borrowers are classified as quality categories I II in accordance with the Bank of Russia Regulation No.
Major finding: The proportional reporting ratio, similar to the relative risk ratio, was significant between pramipexole, ropinirole, cabergoline, bromocriptine, rotigotine, and apomorphine on one hand, and a variety of impulse control disorders on the other.
Obesity significantly increased the risk for SSI in all surgical groups except for abdominal hysterectomy, with risk ratios ranging from 1.62 for knee replacement to 1.87 for large bowel surgery.
Major Finding: At a mean of 5.3 years (for a total HPS follow-up of 11 years), the rate of first vascular events in previously event-free participants was similar in both the initial simvastatin group and the initial placebo (21.7% and 22.5%, respectively; risk ratio, 0.95), Similar patterns were seen for major coronary events (RR, 0.96), strokes (RR 0.98), revascularization procedures (RR, 0.93), vascular mortality (RR, 0.98), nonvascular mortality (RR, 0.97), and cancer incidence (RR, 0.98).
Its capital to risk ratio was flat at 14.1% at the end of March 2011 and its tier 1 ratio dropped slightly to 8.1% from 8.2%.
Multivariable log-binomial regression models were fitted to estimate risk ratio to evaluate the association between electronic fetal heart rate monitoring (EFM) and mortality, while adjusting for age, race, marital status, education, smoking, and the infant's gender.
carotid endarterectomy (8.9% versus 5.8%, respectively; risk ratio 1.53).
Adjusted risk ratio estimates (from log-binomial regression models) indicated increased relative risks in association with being fed soy formula during infancy, maternal prepregnancy diabetes, low childhood socioeconomic status, and early birth (at least 1 month before the due date).
The odds of a positive test increased when the following factors were present: admission as an oncology patient (risk ratio 2.7), diarrhea for at least 2 days prior to testing (risk ratio 2.4), and any gastrointestinal symptom (risk ratio 1.9).