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• What Is Risk? by Gary Anderson

  ARTICLE SYNOPSIS ...What Is Risk? by Gary Anderson There are many ways to view risk. Some measurements treat risk and reward alike; if a stock is outperforming the market to the upside, there is an implicit expectation that the stock may also outperform the market to the downside. This article introduces the concept of comparing how a stock performs during up movements relative to a benchmark and then, separately, measuring performance relative to downward movements by the benchmark. Risk is routinely measured as standard deviation, or volatility. Certainly, volatility is risky. But as a definition, volatility...

AUTHOR: Gary AndersonDATE: APR 1998SUBJECT: New Techniques