VaR measures the potential loss in value of a financial asset or portfolio due to adverse movements in market factors, such as exchange rates, over a specified period and at a given confidence level.some text
Example: TechCorp, a U.S.-based electronics manufacturer, imports components from a supplier in Germany and pays in euros. The VaR for TechCorp represents the maximum expected loss in the value of their euro payments due to fluctuations in the EUR/USD exchange rate over the next 30 days, within a certain statistical confidence interval.
