Volatility

A measure of how much the price of a security fluctuates over time. If it moves up and down frequently over a short period of time it is said to have high volatility and will be a more risky investment. Price volatility is often gauged by alpha and beta. Alpha refers to risks specific to a company regardless of what the market is doing. A high alpha score indicates the stock or fund is likely to be stable. Beta is a means of measuring a stock or fund in relation to the whole of the market. Conservative investors prefer stocks with low beta.

This definition is for general information purposes only