What are the key PMI risk categories?
There are four main types of project risks: technical, external, organizational, and project management. Within those four types are several more specific examples of risk.
What is portfolio risk in project management?
According to the Standard for Portfolio Management, portfolio risk is an uncertain event or condition which, should it occur, may positively or negatively affect one or more project objectives and one or more portfolio success criteria [1].
What are the 5 risk categories?
The Global Report identifies 31 global risks grouped in five categories: environmental, economic, geopolitical, social and technological risks.
What are the 3 categories of risk?
Risk and Types of Risks: Widely, risks can be classified into three types: Business Risk, Non-Business Risk, and Financial Risk.
What is portfolio risk formula?
The level of risk in a portfolio is often measured using standard deviation, which is calculated as the square root of the variance. If data points are far away from the mean, the variance is high, and the overall level of risk in the portfolio is high as well.
How do you identify portfolio risks?
They include:
- Portfolio Standard Deviation. Portfolio standard deviation is one of the most widely used metrics for evaluating risk.
- Value-at-Risk (VAR) The value-at-risk metric examines the potential of extreme loss in the value of a portfolio over a certain timeframe and for a given level of confidence.
- Shortfall Risk.
What is a portfolio risk?
Portfolio risk is a chance that the combination of assets or units, within the investments that you own, fail to meet financial objectives. Each investment within a portfolio carries its own risk, with higher potential return typically meaning higher risk.
How is portfolio risk management different from project risk management?
However, unlike project risk management which is focused on events that could impact the project, portfolio risk management is focused on events that could impact the accomplishment of strategic objectives. The scope of portfolio risk management is far broader than program and project risk management and requires senior leadership involvement.
When is the PMI standard for portfolio management?
The standard describes generally accepted processes associated with portfolio management. As in December 2005, the standard has been submitted to PMI for issue to the PMI Consensus Body for final review and acceptance. The standard is targeted for publication by spring 2006.
How does risk diversification occur in project portfolios?
These interdependencies may either amplify or reduce risk at the portfolio level. As in financial risk management, risk diversification may occur in project portfolios: e.g., a large number of projects may experience cost overruns, offset by other projects, which are completed below budget (Kendrick, 2009).
What does Project Portfolio Management ( PPFM ) do?
The resulting collection of projects is a focused, coordinated, and executable portfolio of projects that will achieve the goals of the organization. PPfM complements project and program management. It aims the organization in the right direction by selecting the best projects to do.
