Tracking Customer Risk Aversion

Following the increased accessibility of retail investors to the financial sector, the indication of their risk propensity has become important to the industry. This research aims to identify the correlation between the existing customer risk aversion analysis method and the actual investment result of the customers. We use the customer investment data and the risk propensity survey result of the 370,000 customers of an investment company in South Korea. The results show that the two factors are insignificantly correlated. We suggest a new method of identifying actual customer risk averseness using the Xgboost model