Understanding risk

"Risk" gets used loosely in everyday language. In investing, it has some specific, measurable forms.

Volatility

The standard deviation of returns — how much a price tends to swing, in either direction. It's a measure of uncertainty, not of loss specifically: a stock that swings up a lot is just as "volatile," by this definition, as one that swings down. InvestSense reports both daily and annualised volatility for a stock in its risk analysis.

Maximum drawdown

The largest peak-to-trough decline over a period — the worst loss you'd have experienced buying at the top and holding through the bottom. This is often the most intuitive risk measure, because it maps directly to lived experience: "how bad could it have gotten."

Beta

How much a stock has historically moved relative to a benchmark index. A beta of 1.5 means it has tended to move about 1.5× the index's swings, in both directions; a beta below 1 means it's historically been comparatively calmer than the market.

The honest limit of all of these

Every one of these measures is calculated from past price behaviour. None of them predicts the future, and a long enough history will generally reveal a worse drawdown than a shorter one. Risk measures are a way to understand what already happened, which is useful — but they're not a ceiling on what could happen next.