Understanding Volatility and Standard Deviation in Investing

Volatility isn't automatically bad — it just means bigger price swings, in both directions. Standard deviation is the common statistical tool for measuring it: how far an asset's returns typically stray from their average. A stock with a higher standard deviation swings around more than one with a lower standard deviation — that's it, that's the whole claim.

Higher volatility means more potential upside AND more potential downside, not just more risk of loss.