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<span id="openzim-page-title" class="mw-page-title-main"><span class="mw-page-title-main">Tracking error</span></span>

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<p>In <a href="Finance" title="Finance">finance</a>, <b>tracking error</b> or <b>active risk</b> is a measure of the risk in an <a href="Investment_portfolio" class="mw-redirect" title="Investment portfolio">investment portfolio</a> that is due to <a href="Active_management" title="Active management">active management</a> decisions made by the <a href="Portfolio_manager" title="Portfolio manager">portfolio manager</a>; it indicates how closely a portfolio follows the index to which it is benchmarked. The best measure is the <a href="Standard_deviation" title="Standard deviation">standard deviation</a> of the difference between the portfolio and index returns.

</p><p>Many portfolios are managed to <a href="Benchmark_(finance)" class="mw-redirect" title="Benchmark (finance)">a benchmark</a>, typically an index. Some portfolios, notably <a href="Index_fund" title="Index fund">index funds</a>, are expected to replicate, before trading and other costs, the returns of an index exactly, while others '<a href="Active_management" title="Active management">actively manage</a>' the portfolio by deviating from the index in order to generate <a href="Active_return" title="Active return">active returns</a>. Tracking error measures the deviation from the benchmark: an index fund has a near-zero tracking error, while an actively managed portfolio would normally have a higher tracking error. Thus the tracking error does not include any risk (return) that is merely a function of the market's movement. In addition to <a href="Financial_risk" title="Financial risk">risk</a> (return) from specific stock selection or industry and <a href="Factor_analysis" title="Factor analysis">factor</a> "betas", it can also include risk (return) from <a href="Market_timing" title="Market timing">market timing</a> decisions.

</p><p>Dividing portfolio active return by portfolio tracking error gives the <a href="Information_ratio" title="Information ratio">information ratio</a>, which is a risk adjusted performance measure.

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<div class="mw-heading mw-heading2"><h2 id="Definition">Definition</h2></div>

<p>If tracking error is measured historically, it is called 'realized' or 'ex post' tracking error. If a model is used to predict tracking error, it is called 'ex ante' tracking error. Ex-post tracking error is more useful for reporting performance, whereas ex-ante tracking error is generally used by portfolio managers to control risk. Various types of ex-ante tracking error models exist, from simple equity models which use <a href="Beta_(finance)" title="Beta (finance)">beta</a> as a primary determinant to more complicated <a href="Factor_analysis" title="Factor analysis">multi-factor fixed income models</a>. In a factor model of a portfolio, the non-systematic risk (i.e., the standard deviation of the residuals) is called "tracking error" in the investment field. The latter way to compute the tracking error complements the formulas below but results can vary (sometimes by a factor of 2).

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<div class="mw-heading mw-heading3"><h3 id="Formulas">Formulas</h3></div>

<p>The ex-post tracking error formula is the <a href="Standard_deviation" title="Standard deviation">standard deviation</a> of the active returns, given by:

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<annotation encoding="application/x-tex">{\displaystyle TE=\omega ={\sqrt {\operatorname {Var} (r_{p}-r_{b})}}={\sqrt {{E}[(r_{p}-r_{b})^{2}]-({E}[r_{p}-r_{b}])^{2}}}={\sqrt {(w_{p}-w_{b})^{T}\Sigma (w_{p}-w_{b})}}}</annotation>

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</math></span><img src="./fcbdc33801fc0d2e9791f95d3385b8096f049523.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -1.838ex; width:88.376ex; height:5.009ex;" alt="{\displaystyle TE=\omega ={\sqrt {\operatorname {Var} (r_{p}-r_{b})}}={\sqrt {{E}[(r_{p}-r_{b})^{2}]-({E}[r_{p}-r_{b}])^{2}}}={\sqrt {(w_{p}-w_{b})^{T}\Sigma (w_{p}-w_{b})}}}" loading="lazy"></span></dd></dl>

<p>where <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle r_{p}-r_{b}}">

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<annotation encoding="application/x-tex">{\displaystyle r_{p}-r_{b}}</annotation>

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</math></span><img src="./27f44976e514f8ff987f26958753594c583ad298.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -1.005ex; width:6.934ex; height:2.676ex;" alt="{\displaystyle r_{p}-r_{b}}" loading="lazy"></span> is the active return, i.e., the difference between the portfolio return and the benchmark return<sup id="cite_ref-1" class="reference"><a href="#cite_note-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> and <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle (w_{p}-w_{b})}">

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<annotation encoding="application/x-tex">{\displaystyle (w_{p}-w_{b})}</annotation>

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</math></span><img src="./d64dc18c7a936329a56f9610030d2c21b728df69.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -1.005ex; width:9.975ex; height:3.009ex;" alt="{\displaystyle (w_{p}-w_{b})}" loading="lazy"></span> is the vector of active portfolio weights relative to the benchmark. The <a href="Mathematical_optimization" title="Mathematical optimization">optimization</a> problem of maximizing the return, subject to tracking error and linear constraints, may be solved using <a href="Second-order_cone_programming" title="Second-order cone programming">second-order cone programming</a>:<span class="mwe-math-element mwe-math-element-block"><span class="mwe-math-mathml-display mwe-math-mathml-a11y" style="display: none;"><math display="block" xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle {\underset {w}{\operatorname {argmax} }}\;\mu ^{T}(w-w_{b}),\quad {\text{s.t.}}\;(w-w_{b})^{T}\Sigma (w-w_{b})\leq \omega ^{2},\;Ax\leq b,\;Cx=d}">

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<annotation encoding="application/x-tex">{\displaystyle {\underset {w}{\operatorname {argmax} }}\;\mu ^{T}(w-w_{b}),\quad {\text{s.t.}}\;(w-w_{b})^{T}\Sigma (w-w_{b})\leq \omega ^{2},\;Ax\leq b,\;Cx=d}</annotation>

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<div class="mw-heading mw-heading3"><h3 id="Interpretation">Interpretation</h3></div>

<p>Under the assumption of normality of returns, an active risk of x per cent would mean that approximately 2/3 of the portfolio's active returns (one standard deviation from the mean) can be expected to fall between +x and -x per cent of the mean excess return and about 95% of the portfolio's active returns (two standard deviations from the mean) can be expected to fall between +2x and -2x per cent of the mean excess return.

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<div class="mw-heading mw-heading2"><h2 id="Examples">Examples</h2></div>

<ul><li><a href="Index_fund" title="Index fund">Index funds</a> are expected to have minimal tracking errors.</li>

<li><a href="Inverse_exchange-traded_fund" title="Inverse exchange-traded fund">Inverse exchange-traded funds</a> are designed to perform as the <i>inverse</i> of an index or other benchmark, and thus reflect tracking errors relative to short positions in the underlying index or benchmark.</li></ul>

<div class="mw-heading mw-heading3"><h3 id="Index_fund_creation">Index fund creation</h3></div>

<p>Index funds are expected to minimize the tracking error with respect to the <a href="Index_(economics)" title="Index (economics)">index</a> they are attempting to replicate, and this problem may be solved using standard optimization techniques. To begin, define <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle \omega ^{2}}">

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</math></span><img src="./9fc60ab391d9835017f0778767fb25a54402d20f.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:2.5ex; height:2.676ex;" alt="{\displaystyle \omega ^{2}}" loading="lazy"></span> to be:<span class="mwe-math-element mwe-math-element-block"><span class="mwe-math-mathml-display mwe-math-mathml-a11y" style="display: none;"><math display="block" xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle \omega ^{2}=(w-w_{b})^{T}\Sigma (w-w_{b})}">

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<annotation encoding="application/x-tex">{\displaystyle \omega ^{2}=(w-w_{b})^{T}\Sigma (w-w_{b})}</annotation>

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</math></span></span>where <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle w-w_{b}}">

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</math></span><img src="./c4facb2669eda2cefb860ffa185852e446250a2c.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:7.106ex; height:2.343ex;" alt="{\displaystyle w-w_{b}}" loading="lazy"></span> is the vector of active weights for each asset relative to the <a href="Performance_attribution" title="Performance attribution">benchmark</a> index and <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle \Sigma }">

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</math></span><img src="./9e1f558f53cda207614abdf90162266c70bc5c1e.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:1.678ex; height:2.176ex;" alt="{\displaystyle \Sigma }" loading="lazy"></span> is the <a href="Covariance_matrix" title="Covariance matrix">covariance matrix</a> for the assets in the index. While creating an index fund could involve holding all <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle N}">

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</math></span><img src="./f5e3890c981ae85503089652feb48b191b57aae3.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:2.064ex; height:2.176ex;" alt="{\displaystyle N}" loading="lazy"></span> investable assets in the index, it is sometimes better practice to only invest in a subset <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle K}">

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</math></span><img src="./2b76fce82a62ed5461908f0dc8f037de4e3686b0.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:2.066ex; height:2.176ex;" alt="{\displaystyle K}" loading="lazy"></span> of the assets. These considerations lead to the following <a href="Quadratic_programming#Integer_constraints" title="Quadratic programming">mixed-integer quadratic programming (MIQP)</a> problem:<span class="mwe-math-element mwe-math-element-block"><span class="mwe-math-mathml-display mwe-math-mathml-a11y" style="display: none;"><math display="block" xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle {\begin{aligned}{\underset {w}{\operatorname {argmin} }}&\quad \omega ^{2}\\{\text{s.t.}}&\quad w_{j}\leq y_{j},\quad \sum _{j=1}^{N}y_{j}\leq K\\&\quad \ell _{j}y_{j}\leq w_{j}\leq u_{j}y_{j},\quad y_{j}\in \{0,1\},\quad \ell _{j},\;u_{j}\geq 0\end{aligned}}}">

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<annotation encoding="application/x-tex">{\displaystyle {\begin{aligned}{\underset {w}{\operatorname {argmin} }}&\quad \omega ^{2}\\{\text{s.t.}}&\quad w_{j}\leq y_{j},\quad \sum _{j=1}^{N}y_{j}\leq K\\&\quad \ell _{j}y_{j}\leq w_{j}\leq u_{j}y_{j},\quad y_{j}\in \{0,1\},\quad \ell _{j},\;u_{j}\geq 0\end{aligned}}}</annotation>

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</math></span></span>where <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle y_{j}}">

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</math></span><img src="./f8df4e372390588acb968986cfc388e50b930b3a.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -1.005ex; width:2.049ex; height:2.343ex;" alt="{\displaystyle y_{j}}" loading="lazy"></span> is the logical condition of whether or not an asset is included in the index fund, and is defined as:<span class="mwe-math-element mwe-math-element-block"><span class="mwe-math-mathml-display mwe-math-mathml-a11y" style="display: none;"><math display="block" xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle y_{j}={\begin{cases}1,\quad &w_{j}>0\\0,\quad &{\text{otherwise}}\end{cases}}}">

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<div class="mw-heading mw-heading2"><h2 id="References">References</h2></div>

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</style><cite id="CITEREFCornuejolsTütüncü2007" class="citation book cs1">Cornuejols, Gerard; Tütüncü, Reha (2007). <i>Optimization Methods in Finance</i>. Mathematics, Finance and Risk. Cambridge University Press. pp. <span class="nowrap">178–</span>180. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-0521861700</bdi>.</cite></span>

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<div class="mw-heading mw-heading2"><h2 id="External_links">External links</h2></div>

<ul><li><a rel="nofollow" class="external text" href="https://www.youtube.com/watch?v=A1sB2ynlNrw">Tracking Error</a> - <a href="YouTube" title="YouTube">YouTube</a></li>

<li><a rel="nofollow" class="external text" href="https://monevator.com/tracking-error-%E2%80%93-a-hidden-cost/">Tracking error: A hidden cost of passive investing</a></li>

<li><a rel="nofollow" class="external text" href="http://moneyterms.co.uk/tracking-error/">Tracking error</a></li>

<li><a rel="nofollow" class="external text" href="https://www.trackinsight.com/education/education-what-is-tracking-error">What is the Tracking Error?</a></li></ul>

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</style><div id="Financial_risk_and_financial_risk_management192" style="font-size:114%;margin:0 4em"><a href="Financial_risk" title="Financial risk">Financial risk</a> and <a href="Financial_risk_management" title="Financial risk management">financial risk management</a></div></th></tr><tr><th scope="row" class="navbox-group" style="width:1%">Categories</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"></div><table class="nowraplinks navbox-subgroup" style="border-spacing:0"><tbody><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Credit_risk" title="Credit risk">Credit risk</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Consumer_credit_risk" title="Consumer credit risk">Consumer credit risk</a></li>

<li><a href="Sovereign_credit_risk" title="Sovereign credit risk">Sovereign credit risk</a></li>

<li><a href="Settlement_risk" title="Settlement risk">Settlement risk</a></li>

<li><a href="Default_(finance)" title="Default (finance)">Default risk</a></li>

<li><a href="Concentration_risk" title="Concentration risk">Concentration risk</a></li>

<li><a href="Credit_derivative" title="Credit derivative">Credit derivative</a></li>

<li><a href="Securitization" title="Securitization">Securitization</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Market_risk" title="Market risk">Market risk</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Commodity_risk" title="Commodity risk">Commodity risk</a> (e.g. <a href="Volume_risk" title="Volume risk">Volume risk</a>, <a href="Basis_risk" title="Basis risk">Basis risk</a>, <a href="Shape_risk" title="Shape risk">Shape risk</a>, <a href="Holding_period_risk" title="Holding period risk">Holding period risk</a>, <a href="Price_area_risk" class="mw-redirect" title="Price area risk">Price area risk</a>)</li>

<li><a href="Equity_risk" title="Equity risk">Equity risk</a></li>

<li><a href="Valuation_risk" title="Valuation risk">Valuation risk</a></li>

<li><a href="Margining_risk" title="Margining risk">Margining risk</a></li>

<li><a href="Interest_rate_risk" title="Interest rate risk">Interest rate risk</a></li>

<li><a href="Inflation_risk" class="mw-redirect" title="Inflation risk">Inflation risk</a></li>

<li><a href="Volatility_risk" title="Volatility risk">Volatility risk</a></li>

<li><a href="Liquidity_risk" title="Liquidity risk">Liquidity risk</a> (e.g. <a href="Refinancing_risk" title="Refinancing risk">Refinancing risk</a>, <a href="Deposit_risk" title="Deposit risk">Deposit risk</a>)</li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Operational_risk" title="Operational risk">Operational risk</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Operational_risk_management" title="Operational risk management">Operational risk management</a></li>

<li><a href="Business_risk" class="mw-redirect" title="Business risk">Business risk</a></li>

<li><a href="Model_risk" title="Model risk">Model risk</a></li>

<li><a href="Reputational_risk" class="mw-redirect" title="Reputational risk">Reputational risk</a></li>

<li><a href="Country_risk" title="Country risk">Country risk</a></li>

<li><a href="Political_risk" title="Political risk">Political risk</a></li>

<li><a href="Legal_risk" title="Legal risk">Legal risk</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Other</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Execution_risk" class="mw-redirect" title="Execution risk">Execution risk</a></li>

<li><a href="Profit_risk" title="Profit risk">Profit risk</a></li>

<li><a href="Systemic_risk" title="Systemic risk">Systemic risk</a></li>

<li><a href="Non-financial_risk" title="Non-financial risk">Non-financial risk</a></li></ul>

</div></td></tr></tbody></table><div></div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Financial_risk_modeling" title="Financial risk modeling">Modeling</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Arbitrage_pricing_theory" title="Arbitrage pricing theory">Arbitrage pricing theory</a></li>

<li><a href="Black%E2%80%93Scholes_model" title="Black–Scholes model">Black–Scholes model</a></li>

<li><a href="Replicating_portfolio" title="Replicating portfolio">Replicating portfolio</a></li>

<li><a href="Cashflow_matching" title="Cashflow matching">Cash flow matching</a></li>

<li><a href="Expected_shortfall" title="Expected shortfall">Conditional Value-at-Risk (CVaR)</a></li>

<li><a href="Copula_(probability_theory)" class="mw-redirect" title="Copula (probability theory)">Copula</a></li>

<li><a href="Drawdown_(economics)" title="Drawdown (economics)">Drawdown</a></li>

<li><a href="First-hitting-time_model" title="First-hitting-time model">First-hitting-time model</a></li>

<li><a href="Immunization_(finance)" title="Immunization (finance)">Interest rate immunization</a></li>

<li><a href="Market_portfolio" title="Market portfolio">Market portfolio</a></li>

<li><a href="Modern_portfolio_theory" title="Modern portfolio theory">Modern portfolio theory</a></li>

<li><a href="Omega_ratio" title="Omega ratio">Omega ratio</a></li>

<li><a href="Risk-adjusted_return_on_capital" title="Risk-adjusted return on capital">RAROC</a></li>

<li><a href="Risk_parity" title="Risk parity">Risk parity</a></li>

<li><a href="Sharpe_ratio" title="Sharpe ratio">Sharpe ratio</a></li>

<li><a href="Sortino_ratio" title="Sortino ratio">Sortino ratio</a></li>

<li><a href="Survival_analysis" title="Survival analysis">Survival analysis</a> (<a href="Proportional_hazards_model" title="Proportional hazards model">Proportional hazards model</a>)</li>

<li><a href="Value_at_risk" title="Value at risk">Value-at-Risk (VaR)</a> and extensions (<a href="Profit_at_risk" title="Profit at risk">Profit at risk</a>, <a href="Margin_at_risk" title="Margin at risk">Margin at risk</a>, <a href="Liquidity_at_risk" title="Liquidity at risk">Liquidity at risk</a>, <a href="Cash_flow_at_risk" class="mw-redirect" title="Cash flow at risk">Cash flow at risk</a>, <a href="Earnings_at_risk" title="Earnings at risk">Earnings at risk</a>)</li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Basic concepts</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Asset_allocation" title="Asset allocation">Asset allocation</a></li>

<li><a href="Asset_and_liability_management" title="Asset and liability management">Asset and liability management</a></li>

<li><a href="Asset_pricing" title="Asset pricing">Asset pricing</a></li>

<li><a href="Capital_asset" title="Capital asset">Capital asset</a></li>

<li><a href="Capital_structure" title="Capital structure">Capital structure</a></li>

<li><a href="Corporate_finance" title="Corporate finance">Corporate finance</a></li>

<li><a href="Cost_of_capital" title="Cost of capital">Cost of capital</a></li>

<li><a href="Diversification_(finance)" title="Diversification (finance)">Diversification</a></li>

<li><a href="Economic_bubble" title="Economic bubble">Economic bubble</a></li>

<li><a href="Enterprise_value" title="Enterprise value">Enterprise value</a></li>

<li><a href="Exchange_traded_fund" class="mw-redirect" title="Exchange traded fund">Exchange traded fund</a></li>

<li><a href="Expected_return" title="Expected return">Expected return</a></li>

<li><a href="Finance" title="Finance">Financial</a>

<ul><li><a href="Financial_adviser" title="Financial adviser">adviser</a></li>

<li><a href="Financial_analysis" title="Financial analysis">analysis</a></li>

<li><a href="Financial_analyst" title="Financial analyst">analyst</a></li>

<li><a href="Financial_asset" title="Financial asset">asset</a></li>

<li><a href="Financial_betting" title="Financial betting">betting</a></li>

<li><a href="Financial_crime" title="Financial crime">crime</a></li>

<li><a href="Financial_engineering" title="Financial engineering">engineering</a></li>

<li><a href="Financial_social_work" title="Financial social work">social work</a></li></ul></li>

<li><a href="Fundamental_analysis" title="Fundamental analysis">Fundamental analysis</a></li>

<li><a href="Growth_investing" title="Growth investing">Growth investing</a></li>

<li><a href="Hazard" title="Hazard">Hazard</a></li>

<li><a href="Hedge_(finance)" title="Hedge (finance)">Hedge</a></li>

<li><a href="Investment_management" title="Investment management">Investment management</a></li>

<li><a href="Systematic_risk" title="Systematic risk">Systematic risk</a></li>

<li><a href="Mathematical_finance" title="Mathematical finance">Mathematical finance</a></li>

<li><a href="Moral_hazard" title="Moral hazard">Moral hazard</a></li>

<li><a href="Risk-return_spectrum" class="mw-redirect" title="Risk-return spectrum">Risk-return spectrum</a></li>

<li><a href="Speculation" title="Speculation">Speculation</a></li>

<li><a href="Speculative_attack" title="Speculative attack">Speculative attack</a></li>

<li><a href="Statistical_finance" title="Statistical finance">Statistical finance</a></li>

<li><a href="Strategic_financial_management" title="Strategic financial management">Strategic financial management</a></li>

<li><a href="Stress_test_(financial)" title="Stress test (financial)">Stress test (financial)</a></li>

<li><a href="Structured_finance" title="Structured finance">Structured finance</a></li>

<li><a href="Structured_product" title="Structured product">Structured product</a></li>

<li><a href="Systemic_risk" title="Systemic risk">Systemic risk</a></li>

<li><a href="Toxic_asset" title="Toxic asset">Toxic asset</a></li></ul>

</div></td></tr><tr><td class="navbox-abovebelow" colspan="2"><div>

<ul><li><a href="Financial_economics" title="Financial economics">Financial economics</a></li>

<li><a href="Investment_management" title="Investment management">Investment management</a></li>

<li><a href="Mathematical_finance" title="Mathematical finance">Mathematical finance</a></li></ul>

</div></td></tr></tbody></table></div></div><div><div class="zim-footer">

This article is issued from <a class="external text" title="Last edited on 2025-08-03" href="https://en.wikipedia.org/wiki/?title=Tracking_error&oldid=1304010316">Wikipedia</a>. The text is available under <a class="external text" href="https://creativecommons.org/licenses/by-sa/4.0/deed.en">Creative Commons Attribution-Share Alike 4.0</a> unless otherwise noted. Additional terms may apply for the media files.

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