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Is VaR a backward looking measure or a prospective measure?

April 26, 2017backward measure var

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Is VaR a backward looking measure or a prospective measure?

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Var is the likely loss for tomorrow which is calculated based on tomorrows expected volatility and not based on todays volatility and so VaR is a prospective measure of risk. As defined, VaR at 95% confidence level outlines the maximum expected loss in the 95 out of 100 probable price scenarios.