# Professor Viral Acharya discusses the merits of using conditional value-at-risk (CoVAR) for stress tests of investment companies

1 Faculty News June 2, 2016 ![Risk.net logo](/sites/default/files/styles/246w/public/assets/images/risknet192x144.jpg?itok=EfWPnsZw)>

Excerpt from [Risk.net](http://www.risk.net/risk-magazine/feature/2459277/sec-prepares-dodd-frank-buy-side-stress-tests) -- "'CoVAR is an interesting statistical concept about co-dependence in outcomes of individual security or fund returns with the market's or another index's returns, but there is no causality associated with it,' says New York University's [Acharya](http://www.stern.nyu.edu/faculty/bio/viral-acharya). 'It is hard to make the conceptual case that we should regulate a fund or asset manager based on CoVAR.'"

[Read more](http://www.risk.net/risk-magazine/feature/2459277/sec-prepares-dodd-frank-buy-side-stress-tests)