A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- VolatilityHow sharply and often an investment's price swings up and down over a given period.
- AlphaThe extra return an investment earns above or below what its risk level and the market would predict.
- Standard DeviationA statistic showing how widely an investment's returns swing around their average, used to gauge risk.
- CorrelationA measure of how closely two investments move together, which helps you build a diversified mix.
- Risk ToleranceHow much investment ups and downs you can handle emotionally and financially without changing your plan.
- BenchmarkA standard index used to compare how well your investments or a fund are performing.
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Plain-English education — not personalized legal, tax, or investment advice.