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Spread between risk models (Fat-Tailed Value at Risk Gaussian 1-Day 99% VaR) for economic sectors as part of S&P 500 composition Source: FactSet Daily return of stocks, aggregated on economic sector as part of S&P 500 composition Source: FactSet The reasoning behind the widening spread for sectors, where the returns are not the worst in the recent month, is that volatility increases in those sectors, as captured by the fat-tailed model due to the distribution their returns follow

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