Stress Testing evaluates portfolio robustness by modeling performance during hypothetical or historical events (e.g., 2008 crisis, interest rate shock, geopolitical conflict). These tests highlight vulnerabilities and inform better risk budgeting and mandate adjustments. They are a cornerstone of institutional risk governance, especially for fund of funds, segregated accounts, and macro strategies. Stress Testing complements traditional metrics like VaR and drawdown by focusing on tail risks and structural weaknesses, and is often integrated into automated risk platforms or required by regulatory bodies.