Assume portfolio returns are as follows: Yesterday's return: 0.8, day before yesterday's return: -0.9. The conditional variance of the portfolio can be derived with the following formula: 1-2 T i=1 i-1 t-1 Using the value for the decay factor as given in RiskMetrics for daily variance predictions, the conditional variance will be: Assume portfolio returns are as follows: Yesterday's return: 0.8, day before yesterday's return: -0.9. The conditional variance of the portfolio can be derived with the following formula: 1-2 T i=1 i-1 t-1 Using the value for the decay factor as given in RiskMetrics for daily variance predictions, the conditional variance will be: