Free tool · Risk
Darwinex Zero · VaR & Leverage
Every DARWIN is risk-normalized to a common target VaR, so the DARWIN re-leverages your strategy to hit that target. Enter your volatility and the target VaR to see the leverage factor and your normalized return and volatility.
Normalization
DARWIN leverage factor
—×
target VaR ÷ your VaR
Your VaR vs. target VaR
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You—
Target—
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Your monthly VaR (z × σ)
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Target DARWIN VaR
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Normalized monthly return
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Normalized volatility (= target ÷ z)
Illustrative only — not affiliated with, or endorsed by, Darwinex. The real VaR normalization is adaptive and proprietary, and the target and methodology change; verify the current terms on Darwinex. Real return distributions are not perfectly normal, so treat the factor as intuition, not an exact figure.
How it works
VaR normalization, in one factor
Darwinex re-leverages every DARWIN to a common target VaR so investors can compare returns at equal risk. Under a normal approximation, your monthly VaR ≈ z × your monthly volatility, where z = 1.645 at 95% confidence and 2.326 at 99%. The DARWIN leverage factor is simply the target VaR divided by yours: a conservative strategy (VaR below target) gets leveraged up, and an aggressive one (VaR above target) gets scaled down. Your returns — and drawdowns — are multiplied by that same factor inside the DARWIN.
monthly VaR ≈ z × σ (z = 1.645 at 95%) · DARWIN leverage = target VaR ÷ your VaR
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