 | This article relies largely or entirely on a single source .(July 2015) |
In the context of risk measurement, a risk metric is the concept quantified by a risk measure. When choosing a risk metric, an agent is picking an aspect of perceived risk to investigate, such as volatility or probability of default. [1]
In a general sense, a measure is a procedure for quantifying something. A metric is that which is being quantified. [2] In other words, the method or formula to calculate a risk metric is called a risk measure.
For example, in finance, the volatility of a stock might be calculated in any one of the three following ways:
These are three distinct risk measures. Each could be used to measure the single risk metric volatility.
 | This finance-related article is a stub. You can help Wikipedia by adding missing information. |