Monte Carlo Simulation | AlphaVault AI

Return Distribution Model

Normal Gaussian

Student-t Fat tails

Log-Normal Skewed right

Jump Diffusion Sudden shocks

Regime Switch Bull/Bear

GARCH Volatility clusters

Monthly Investment (EUR)

DCA amount

Lump Sum Amount (EUR)

One-time investment

Annual Withdrawal Rate (%)

e.g., 4% rule

Withdrawal Start Year

When to retire

Est. Monthly Yield (%)

Expected return

Volatility (%)

Annual std dev

Student-t DF

2-10 recommended

Jump Intensity (λ)

Jumps/year

Jump Magnitude (%)

Average jump size

Horizon (Years)

Projection period

Number of Simulations

Max: 50,000

Target Value (EUR)

Goal amount

Inflation Rate (%)

Annual inflation

Quick Start Templates

Scenario Manager

Simulation Parameters

Return Distribution Model

Investment Strategy

Simulation Results

Final Portfolio Value

Advanced Risk Metrics

Portfolio Evolution Over Time

Return Distribution

Probability Analysis

Maximum Drawdown

Risk Analysis

Sensitivity Analysis (Tornado)

2D Parameter Heat Map

Metrics Correlation Matrix

Risk-Return Efficient Frontier

Stress Testing

Time to Target

Rolling Sharpe Ratio

DCA vs Lump Sum Comparison

Retirement Withdrawal

Quick Start Templates ?

Scenario Manager ?

Simulation Parameters

Return Distribution Model ?

Investment Strategy

Simulation Results ?

Final Portfolio Value

Advanced Risk Metrics ?

Portfolio Evolution Over Time

Return Distribution

Probability Analysis

Maximum Drawdown ?

Risk Analysis ?

Sensitivity Analysis (Tornado) ?

2D Parameter Heat Map ?

Metrics Correlation Matrix ?

Risk-Return Efficient Frontier ?

Stress Testing ?

Time to Target ?

Rolling Sharpe Ratio ?

DCA vs Lump Sum Comparison

Retirement Withdrawal

🎲 Advanced Monte Carlo Simulation

📊 What's This?

🚀 Quick Start Templates

Available Templates

🛡 Conservative

⚖ Balanced

📈 Aggressive

🏖 Retirement

₿ Crypto

📊 Distribution Models Explained

Why Different Distributions?

1⃣ Normal (Gaussian)

2⃣ Student-t

3⃣ Log-Normal

4⃣ Jump Diffusion (Merton Model)

5⃣ Regime Switching

6⃣ GARCH

💾 Scenario Manager

Save & Compare Simulations

How to Compare Scenarios

💰 Monthly Investment Strategy

📈 What Is Dollar-Cost Averaging (DCA)?

✅ Advantages

📊 Example

📊 Expected Monthly Yield

📐 Definition

📈 Common Values

📉 Understanding Volatility

📊 Definition

📈 Typical Values (Annual)

🔢 Number of Simulations

🎯 Why Multiple Simulations?

📊 How Many Do You Need?

📊 Student-t Degrees of Freedom

What Is It?

DF = 2-3 (Extreme Fat Tails)

DF = 4-6 (Moderate Fat Tails) ⭐

DF = 7-10 (Slightly Fat Tails)

⚡ Jump Intensity (λ) Explained

What Is It?

λ = 0.1 — Low Frequency

λ = 0.2-0.3 — Moderate ⭐

λ = 0.5-0.7 — High

λ = 1.0+ — Extreme

📉 Jump Magnitude (%) Explained

What Is It?

-5% to -8% (Moderate Corrections)

-10% to -15% (Significant Crashes) ⭐

-20% to -30% (Severe Crashes)

-40%+ (Catastrophic)

📊 How to Read Your Results

📈 Key Metrics Explained

1⃣ Median (50th Percentile)

2⃣ 10th Percentile (Pessimistic)

3⃣ 90th Percentile (Optimistic)

4⃣ Best/Worst Case

⚠ Risk Metrics Explained

📊 Key Risk Indicators

Quick Start Templates

Scenario Manager

Return Distribution Model

Simulation Results

Advanced Risk Metrics

Maximum Drawdown

Risk Analysis

Sensitivity Analysis (Tornado)

2D Parameter Heat Map

Metrics Correlation Matrix

Risk-Return Efficient Frontier

Stress Testing

Time to Target

Rolling Sharpe Ratio