> ## Documentation Index
> Fetch the complete documentation index at: https://docs.activeviam.com/llms.txt
> Use this file to discover all available pages before exploring further.

# ES (model variation)

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|                                      |                                                                                                                                              |
| ------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------- |
| **Description**                      | For each risk class and allin risk class, this is the ratio of the liquidity adjusted ES for reduced current set and ES for full current set |
| **Hierarchies required in the view** | [Risk Classes](./risk-classes)                                                                                                               |
| **Reference**                        | [\[MAR33.5\]](https://www.bis.org/basel_framework/chapter/MAR/33.htm?inforce=20230101\&published=20200327#paragraph_MAR_33_20230101_33_5)    |
| **Formula**                          | $\displaystyle \frac{ES_{R,C}}{ES_{F,C}}$                                                                                                    |

To evaluate how much variation of the full ES model is explained by the reduced set of risk-factors (MAR 33.5 (2) (b)), the ES (Model Variation) avg measure should be evaluated for the allin risk-class.

The ES (Model Variation) measure is the ratio of the ES (Liquidity Adj.) measures for the reduced and full sets of risk factors (over the current data set). i.e. ES\*\{R,C} / ES\*\{F,C}. As per MAR33.5 (2) (b), this ratio should average over 75% for the last 12 weeks.