Market risk encompasses the uncertainty and potential financial loss generated by broad-based fluctuations in asset prices, driven by factors such as interest rates, inflation, currency movements, and macroeconomic indicators. Unlike idiosyncratic risk, which pertains to specific firms or sectors and can be minimized through diversification, market risk is systemic throughout the global financial landscape. It can affect the performance of equities, bonds, commodities, and other asset classes simultaneously. The inherent challenge lies in managing this pervasive risk by balancing portfolio construction, hedging strategies, and regulatory oversight to mitigate vulnerabilities while still pursuing returns. For example, we can adopt a market-neutral strategy to bet on the relative difference between two assets rather than focusing on the directional change of a single asset, which is often random and difficult to predict.