Volatility

A statistical measure of the dispersion of returns, typically expressed as annualized standard deviation. High volatility means returns fluctuate widely; low volatility means returns are more stable. For example, an investment with 5% volatility is more stable than one with 20% volatility. Volatility is central to risk measurement but does not distinguish between upside and downside fluctuations—a rising market with high volatility may be positive for investors.