Volatility Target Position Calculator
Divide the target portfolio volatility by the asset's own volatility to get the needed allocation or leverage, then convert to notional (capped by a leverage limit).
Results
Fill in the inputs and click Calculate.
- Required Leverage/Weight
- –
- Used Leverage
- –
- Required Notional
- –
- Achieved Volatility
- –
Risk disclaimer
Volatility comes from your inputs or estimates and is not the future; leverage magnifies gains and losses.
What is vol-targeting?
More volatile assets need smaller weights to hit a portfolio volatility target; if the target exceeds the asset's own, leverage is required.
This is deterministic math: with asset vol σa and target σt, the weight is σt ÷ σa.
How to use
- Enter the asset's annualized volatility %.
- Enter your target portfolio annual volatility %.
- Enter account equity and a leverage cap (default 10).
- Click Calculate for the required allocation/leverage and notional.
Formula
- Required leverage = target vol ÷ asset vol
- Used leverage = min(required, cap)
- Notional = equity × used leverage
- Achieved volatility = asset vol × used leverage
Example
Asset vol 60%, target 30%, equity 10,000 → required 0.5 (half the capital), notional 5,000, achieved 30%.
Target 90% with a 10× cap → required 1.5, notional 15,000, achieved 90%.
FAQ
What if required leverage is below 1?
Do not go all-in: part of the capital hits the target, and the rest can stay idle or go elsewhere.
Hitting the leverage cap?
Achieved volatility lands below the target; the output shows that level so you can weigh the trade-off.