> For the complete documentation index, see [llms.txt](https://docs.hodlify.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.hodlify.io/risk-class-metrics/strategy-risk.md).

# Strategy Risk

It refers to the risk associated with the vault's different farming strategies, such as auto market-neutral leveraged farming or funding rate arbitrage strategy.

### 1. Leverage level of the farming strategy

* It refers to the degree of borrowing or margin.
* The borrowing can be used to amplify potential returns or hedge the underlying assets.  

### 2. Level of market neutrality

* It efers to the degree of exposure to the broader cryptocurrency market, with higher levels of market neutrality indicating a more diversified portfolio that is less susceptible to market volatility.

### 3. Volatility of the underlying assets

* It refers to the degree of price fluctuations in the underlying assets, with higher volatility indicating a greater potential for gains or losses. 

It is important to note that the specific weightings and ratings assigned to each metric may vary depending on the strategy and its unique characteristics.