Volatility

Volatility measures the range of price movements in securities and is expressed as the annualized standard deviation of returns. It is the most widely used risk measure in finance.

Typical values sit historically at roughly 15–20 % per year for global equities, 5–10 % for government bonds and 25–50 % for individual stocks. The VIX, often called the "fear gauge", measures the expected volatility of the S&P 500.

Volatility is symmetric: it captures both upward and downward moves. For investors who want to focus purely on downside risk, the maximum drawdown is often the more meaningful figure.