Decouple portfolio returns to reveal the independent returnsof your sector and company-specific bets.

Every portfolio is a composite of intentional market, sector, and industry-level bets. ERM3 reveals the structural core of your returns by decomposing gross performance into tangible systematic and idiosyncratic components. This institutional-grade transparency empowers intelligent investing, providing the clarity to validate your logic, own your convictions, and manage your risk.

No credit card required In-browser analysis Bank-level encryption

Developers: install the CLI, then grab a key and open the API reference on riskmodels.app

How It Works

See your risk decompose in real time

ERM3 strips gross returns into market, sector, sub-sector, and residual — so you know exactly where exposure lives and how to hedge it.

Example: NVDA
Market factor

The first hedge strips out the market regime that SPY explains.

Gross return
Explained risk stack
Market
54%
Sector
23%
Sub-sector
13%
Residual
10%

Seamless Model Integrity

Connect your entire book of business via Plaid. No CSVs or manual data entry. Our engine automatically resolves your holdings against an institutional-grade security master, ensuring your risk models are always synced with live brokerage data.

Structural Attribution

Move past the 'Factor Zoo.' Decompose your performance into Market, Sector, and Industry residuals to see the truth behind your diversification. Identify unintended concentration before it leads to a drawdown.

Tactical Risk Calibration

Translate academic insights into tradeable reality. ERM3 provides dollar-denominated hedge ratios for liquid ETFs like SPY, XLK, and SMH. Calibrate your exposure to specific industries while keeping your high-conviction idiosyncratic bets intact.

Institutional rigor with retail privacy. Your full holdings never leave your machine; our SDK runs locally on your terms.

FAQ

Common questions about RiskModels

What is the Portfolio Risk Index (PRI)?

The Portfolio Risk Index (PRI) is a normalized total risk metric that measures your portfolio's volatility relative to the S&P 500. A score of 100 means your portfolio has the same total risk as SPY; above 100 means higher volatility, below 100 means lower. The PRI breaks down your risk into four components: Market (broad market exposure), Sector (industry tilts), Subsector (specific industry segments), and Idiosyncratic (stock-specific risks). View your PRI in real-time on the Dashboard Analytics tab, including historical trends to track how your portfolio's risk evolves over time.

Is my financial data private?

Absolutely. Your specific portfolio holdings and financial data never reach our servers. We use a "Local-First" architecture where your data from Plaid is combined with our ERM3 risk model directly in your browser. We only see that you have linked an account at a specific institution (e.g., Fidelity or Schwab); we never see or store the actual assets you own.

What does it mean to "Tax-Efficiently Scale" my risk?

Scaling allows you to adjust your market exposure without selling your winners and triggering a capital gains tax event. If your Risk Audit shows you are over-indexed to a specific sector, you can "scale down" that risk by using an inverse ETF hedge. This keeps your capital invested and growing while protecting you from targeted volatility.

Can I access ERM3 via API?

Yes! The ERM3 factor data that powers this site is available via API for developers and institutional clients. Access daily updated factor metrics, decomposition endpoints, and ticker returns data. Visit the developer platform on riskmodels.app for authentication, endpoints, and getting started.