Risk language — the wiggle and the hole

Volatility is the wiggle. Drawdown is the hole measured from a peak. They answer different questions, and using one where the other was meant is the most common error in the vocabulary.

What you will be able to do

After this lesson you can say precisely what volatility and drawdown each measure, demonstrate that identical volatility can hide very different drawdowns, and compute what a given fall costs to recover.

Inside this lesson

Two questions, two numbers
The same thirty days, reshuffled
Why the hole is the number that matters
Getting back is not symmetric
What VaR is, and is not

This lesson is on Scholar

Audit includes orientation and the two-rooms lesson. The rest of the path is paid course access — still education, still not advice.

Included on Scholar · $79/month tuition.