Managing Market Risk in Equities Portfolio

As a portfolio manager for a mid-sized investment firm, you have been tasked with evaluating the firm’s exposure to market risk in its equities portfolio. The firm's portfolio consists of a diverse array of equities across multiple sectors, with a total market value of $150 million. Recent market volatility has raised concerns among the firm's stakeholders about potential future losses.

Your objective is to recommend strategies for managing market risk within this equities portfolio. Specifically, you should discuss the assessment of current market risk exposure and propose at least two specific risk management techniques that could be applied. Be sure to justify your recommendations with relevant theoretical frameworks or empirical evidence.