Differentiate between Historical and Hypothetical Stress Testing Scenarios

Historical stress testing uses actual past market events (e.g. the 2008 crisis or a specific crypto crash) to re-evaluate the portfolio's losses under those conditions. Hypothetical stress testing creates plausible but not necessarily observed extreme scenarios (e.g. a 50% drop in Bitcoin price combined with a 30% increase in volatility) to test the margin model's resilience to unprecedented events.