Scenario
USD spike — A sharp dollar rally tightens global liquidity; risk assets (SPY) fall.
Portfolio impact
A portfolio with this exposure would have an estimated move of -8.5% under this scenario (driver: SPY -7% (scenario assumption), applied via each holding's downside beta to SPY).
Contributions
| Holding | Weight | Beta-implied shock | Contribution |
|---|---|---|---|
| SMH | 30% | -9.2% | -2.8% |
| QQQ | 30% | -7.6% | -2.3% |
| SOXX | 20% | -9.5% | -1.9% |
| IGV | 20% | -7.7% | -1.5% |
Vulnerabilities
Largest negative contributors: SMH (-2.8%), QQQ (-2.3%), SOXX (-1.9%). Concentration: QQQ is 30% of the book; SMH is 30% of the book.
Possible adjustments
Common ways investors reduce exposure to a dollar shock include trimming the highest-beta names and adding lower-beta or defensive exposure. Position sizing and any changes remain the investor's own decision.
Reality check
A single-factor, downside-beta estimate with a scenario-assumption shock — directional only, not a prediction or personalized advice. Betas and shock sizes shift across regimes.