Riskini

Riskini is a term used in risk management to denote a small unit of risk, intended to capture the marginal increase in risk from a tiny change in exposure or position. In theory, a riskini is not a fixed quantity; its value depends on the risk measure chosen (for example value at risk or expected shortfall) and on the model assumptions used to estimate potential losses. As a conceptual tool, riskini helps analysts discuss how incremental changes contribute to overall risk and how marginal risk accumulates across a portfolio.

Etymologically, riskini blends the word risk with the Italian diminutive suffix -ino, a usage found in some educational texts and informal discussions to emphasize small, unit-sized risk increments. It is not a standardized term in formal risk frameworks and may be used only in illustrative or pedagogical contexts.

Calculation and interpretation of a riskini typically involve a derivative view. If value at risk is the reference measure, a riskini can be approximated as the derivative of VaR with respect to a small change in exposure (ΔVaR per unit of added position). Similarly, for expected shortfall, the riskini corresponds to the derivative of ES with respect to exposure. Practically, a riskini represents how much risk would change for a tiny adjustment to the portfolio.

Applications and limitations: riskini is mainly used in teaching, scenario analysis, and risk budgeting to explain marginal risk contributions. It is not standardized, can vary with the chosen risk measure and model, and is not directly observable as a standalone quantity.