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Read the supplied example
The downloadable CSV uses 40/60 weights, 20%/10% standard deviations and correlation 0.3. It records decimal variance components and percentage-point volatility contributions separately. The values are static teaching entries, not spreadsheet formulas.
Reconcile the squared-unit layer
Check covariance 0.006, own terms 0.0064 and 0.0036, cross term 0.00288 and total variance 0.01288. Only after summing these quantities should the square root be taken.
Reconcile the return-scale layer
| Check | Expected relationship |
|---|---|
| Weighted components | A plus B equals total volatility |
| Risk shares | Signed shares sum to one |
| Capital percentages | Sum to 100%, distinct from risk shares |
| Zero total volatility | Do not compute volatility-based ratios |
Preserve units when replacing numbers
If adapting the worksheet, update all linked values and state the assumption record. Keep signed components and unrounded calculation evidence. A displayed rounding difference is different from a missing covariance product.