Which of the following is NOT a method to assess tail risk?

To understand why the choice of fundamentals analysis as the answer is appropriate, it's important to clarify what tail risk assessment typically involves. Tail risk refers to the risk of events that are statistically unlikely but can have severe consequences. Methods for assessing tail risk generally focus on extreme market behavior or stress conditions that could lead to such events.

Scenario analysis, including both historical and hypothetical scenarios, is a common method used in the evaluation of tail risk. This helps in understanding potential outcomes in rare but impactful situations, allowing risk managers to identify vulnerabilities in their portfolios. Additionally, examining correlations within various scenarios can highlight interconnected risks that may exacerbate tail events.

Fundamentals analysis, on the other hand, focuses on the intrinsic value of an asset based on economic indicators, company performance, and market conditions. While this method is crucial for evaluating long-term investment decisions and understanding value, it does not directly address the assessment of extreme events or the analysis of potential outcomes during rare market conditions. Consequently, it does not fit within the specialized methods aimed at understanding tail risk.