priskribon

Priskribon is a conceptual data visualization technique used to depict price risk across assets over time. The term is derived from pris, meaning price, and ribon, a neologism suggesting a flexible ribbon that winds through price data to encode risk. It is not a formal financial metric but appears in theoretical discussions and in open-source demonstrations of risk visualization.

Construction and interpretation: A priskribon relies on historical price data and a probabilistic model of future price paths. For each time point, a distribution of possible price outcomes is generated using a rolling volatility estimate and a chosen probability model. The ribbon is drawn as a vertical band or colored gradient around the price path, with color intensity or width corresponding to the predicted probability of outcomes (e.g., inner light blue for high confidence, outer red for high risk). The result is a single visualization that couples price history with a risk envelope.

Applications and use cases: It is used in educational contexts to illustrate the relationship between price movements and risk, in dashboard visualizations for traders experimenting with risk-aware strategies, and in some simulations of market scenarios. It can also aid in communicating risk to non-experts by providing an intuitive visual cue.

Limitations and critique: As with any model-based visualization, priskribon relies on assumptions about volatility, distribution, and time horizon. It may mislead if not clearly labeled or if the chosen color scale implies certainty. It should be complemented with traditional metrics such as value at risk, expected shortfall, and scenario analysis.