variance

The expected square-distance of a random quantity from its mean. For returns `r` with mean `μ`, `Var(r) = E[(r − μ)²]`; the units are the _square_ of whatever you started with, which is why people usually quote the square root, _standard deviation_, instead. Variance is the workhorse measure of _risk_ in finance: not "how much could I lose worst-case?" but "how much does the outcome jitter from the average?". Two assets with the same mean return can have wildly different variances, and that gap is the entire reason a portfolio is more than the sum of its parts.