Volatility

The dispersion of returns, usually measured as an annualised standard deviation.

Daily volatility of 1.8% annualises to about 28.6% using the square root of the number of trading days.

Whether it is a good measure of risk is one of the oldest arguments in the subject. It is symmetric, treating a large gain as equivalent to a large loss, and it says nothing about permanent capital loss, which is what actually matters to an owner. It also assumes a distribution with thinner tails than markets actually have.

Its defence is that it is measurable, comparable and available, and no proposed alternative has all three.

Use it, and know what it cannot see.

Dispersion is not the same as danger.