Expected Shortfall (ES) is a risk measure used in finance to assess the potential loss in an investment portfolio during extreme market conditions. It calculates the average loss that occurs beyond a specified percentile of the loss distribution, typically focusing on the worst-case scenarios. For example, if the ES is calculated at the 95% level, it represents the average loss in the worst 5% of cases. ES is often used alongside other risk metrics like Value at Risk (VaR) to provide a more comprehensive view of potential losses. Unlike VaR, which only indicates the maximum loss at a certain confidence level, ES gives insight into the severity of losses that could occur in adverse situations, making it a valuable tool for risk management.