Risk vs OpportunityGenerally speaking, the goal of strategy is not to maximize opportunity and the goal of risk management is not to minimize risk. Both strategy and risk management seek to optimize total reward within the context of an organization or individual's risk tolerance.The future can't be predicted with absolute certainty and the risk-opportunity tradeoff is often a best guess or mathematical estimate.
Risk-Reward RatioThe risk-reward ratio is a common way to represent estimates of the risk vs opportunity tradeoff for a given strategy.
|Risk vs Opportunity|
Potential for a future loss.
Potential for a future gain.