DEFINITION of 'Risk Measures'
Statistical measures that are historical predictors of investment risk and volatility and major components in modern portfolio theory (MPT). MPT is a standard financial and academic methodology for assessing the performance of a stock or a stock fund compared to its benchmark index.
INVESTOPEDIA EXPLAINS 'Risk Measures'
There are five principal risk measures:
Alpha: Measures risk relative to the market or benchmark index
Beta: Measures volatility or systemic risk compared to the market or the benchmark index
RSquared: Measures the percentage of an investment's movement that are attributable to movements in its benchmark index
Standard Deviation: Measures how much return on an investment is deviating from the expected normal or average returns
Sharpe Ratio: An indicator of whether an investment's return is due to smart investing decisions or a result of excess risk.
Each risk measure is unique in how it measures risk. When comparing two or more potential investments, an investor should always compare the same risk measures to each different potential investment to get a relative performance.

Time Charter Equivalent  TCE
A shipping industry standard used to calculate the average daily ... 
Standard Deviation
1. A measure of the dispersion of a set of data from its mean. ... 
Alpha
1. A measure of performance on a riskadjusted basis. Alpha takes ... 
RSquared
A statistical measure that represents the percentage of a fund ... 
Modern Portfolio Theory  MPT
A theory on how riskaverse investors can construct portfolios ... 
Beta
A measure of the volatility, or systematic risk, of a security ...

Bonds & Fixed Income
Achieving Better Returns In Your Portfolio
We look at three risk factors that best explain the bulk of equity performance. 
Investing Basics
Beta: Know The Risk
Beta says something about price risk, but how much does it say about fundamental risk factors? Find out here. 
Options & Futures
Adding Alpha Without Adding Risk
Learn how to generate higher returns in your portfolio while keeping the same risk profile. 
Mutual Funds & ETFs
Understanding Volatility Measurements
How do you choose a fund with an optimal riskreward combination? We teach you about standard deviation, beta and more! 
Economics
What's the relationship between r squared and beta?
Learn about the relationship between Rsquared and Beta. Explore how the concepts are related and often used in conjunction with portfolio Alpha. 
Economics
What are some limitations of the consumer price index (CPI)?
Explore some of the basic limitations of the widely used economic indicator, the consumer price index, or CPI, and examine the criticism of its accuracy. 
Economics
Is the consumer price index (CPI) a cost of living index?
Explore the consumer price index (CPI) and understand why it is not an actual cost of living index although it is often identified as one. 
Mutual Funds & ETFs
What are the risks involved in keeping my money in a money market account?
Setting aside funds in a money market account can be a safe investment strategy, but investors should be aware of the risks inherent to money market options. 
Economics
Where do funds report their rsquared?
Learn where to find Rsquared calculations for mutual funds. Explore Rsquared, Alpha and Beta and how these calculations measure securities' performance. 
Mutual Funds & ETFs
How much of my total assets should I be keeping in my money market account?
Investing a portion of total assets in a cash position such as a money market account provides investors access to funds in the case of an emergency.