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Risk and Return, Types of Risk - Coggle Diagram

- - - - Variance
      - Standard deviation (volatility)
        
        Square root of the variance
- - - - Risk diversification
        
        If the correlation/covariance coefficient between the returns is positive, then the movement of returns away from expected values would tend to be in the same direction for both securities
        
        If the correlation/covariance coefficient is negative, then returns would tend to move in opposite directions
      - Covariance
        
        The expected product of the deviations of returns on two stocks from their means
      - Correlation
        
        The covariance divided by the standard deviation of each return (always between -1 and 1)