We use standard deviation to show how much portfolio performance could vary on a yearly basis. Generally, the lower the volatility, the lower the dispersion of returns in a given portfolio.

This measures the maximum drop in performance (expressed as a %) from peak to trough through the life of a portfolio. Drawdown risks can be mitigated with a well-diversified portfolio.

Annualized return is a measure of how well a portfolio has performed, on average, each year. For any investment, returns will vary and there is no guarantee that any strategy, including a hedging strategy, will be effective in achieving its intended effect.