Usually through the the stock return's standard deviation. Standard deviation measures the total risk which you are taking when you purchase a stock. The basic idea is that the standard deviation is a measure of volatility: the more a stock's returns vary from the stock's average return, the more volatile the stock, the more risky it is since you are exposed to potential big losses as well as big gains.
2 Stocks/Portfolio may have the same return, but their standard deviations can be vastly different. This will allow you to pick the appropriate stock at that particular risk level which you are willing to be exposed to while investing.
If you are looking to buy multiple stocks (maybe about 30) in diversified sectors of the same market, you should instead look at a stocks Systematic risk,or Beta. This is a measure of how sensitive a stock's return is relative to the market, which is a better gauge of the amount of risk you take up given that with a diversified portfolio, your idiosyncratic or diversifiable risk is diversified away, since the ups of one stock will balance out the down of the other.
Usually through the the stock return's standard deviation. Standard deviation measures the total risk which you are taking when you purchase a stock. The basic idea is that the standard deviation is a measure of volatility: the more a stock's returns vary from the stock's average return, the more volatile the stock, the more risky it is since you are exposed to potential big losses as well as big gains.
2 Stocks/Portfolio may have the same return, but their standard deviations can be vastly different. This will allow you to pick the appropriate stock at that particular risk level which you are willing to be exposed to while investing.
If you are looking to buy multiple stocks (maybe about 30) in diversified sectors of the same market, you should instead look at a stocks Systematic risk,or Beta. This is a measure of how sensitive a stock's return is relative to the market, which is a better gauge of the amount of risk you take up given that with a diversified portfolio, your idiosyncratic or diversifiable risk is diversified away, since the ups of one stock will balance out the down of the other.