Can someone please explain the difference between calculating the Value at Risk through the Historical Simulation Method and the Model Building Approach method.

I am using APA Group and Transurban (TCL) for a homework question. I have to find the 5-day 99% VaR and so far I have N (-2.33) and X = 5

I can do the calculations for one type of method but I am unsure which method it is, I will show.

Historical Prices for 501 trading days for APA and TCL have been collected and collated with $350,000 invested in APA and $650,000 in TCL.

Coefficient Correlation = 0.5, Daily Volatility for APA = 1.74% or0.0174 and for TCL = 1.89% or 0.0189

APA SD 1-day --> 350,000 * 0.0174 = 6090

SD 5-days --> 6090 *?5 = 13,618

VaR for APA --> 13,618 *2.33 = 31,730

TCL SD 1-day --> 650,000 *0.0189 = 12,285

5SD 5-days --> 12,285 *?5 = 27,470

VaR for TCL--> 27,470 * 2.33 = $64,005

SD ofPortfolio Value --> 6090²+ 12,285²+ 2* 0.5 * 6090* 12,285 = $16, 211

16, 211 * 2.33 *?5 = 84, 460

(31,730 + 64,005) - 84,460 = $11,275

Is this Historical Simulation or Model Building?