A good set of stress tests enables managers to proactively reduce unacceptable risk levels
by indicating how to structure hedges for unacceptable risk exposures (i.e., where to take risk-offsetting
long or short positions). A consistent set of stress tests that is run on multiple,
independently managed portfolios can reveal overall concentrations in risk that might not appear
in the aggregate portfolio VaR (i.e., portfolio effects may differ in stressed markets).