• Risk management is the process of identifying, analyzing and accepting or mitigating uncertainty in investment decisions.
  • Risk is inseparable from profit in the investment world.
  • There are many tactics to identify risk; one of the most common is the standard deviation, a statistical measure of dispersion around a central trend.
  • Beta, also known as market risk, is a measure of the volatility or systematic risk of an individual stock compared to the entire market.
  • Alpha - a measure of excess return; money managers who use active strategies to beat the market are subject to alpha risk.