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 ... 
RSquared
A statistical measure that represents the percentage of a fund ... 
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Alpha
1. A measure of performance on a riskadjusted basis. Alpha takes ... 
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 ...

What are some of the advantages of using coefficient of variation (COV)?
There are several advantages associated with using coefficient of variation (COV). COV is a statistical measure that is normalized ... Read Full Answer >>

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