The most basic concept taught in Finance 101 is the tradeoff between risk and return: Higher risk gives us the possibility for higher returns. As a bedrock principal of market relationships, this concept forms the basis of a number of landmark theories such as the Capital Asset Pricing Model (CAPM) and the Efficient Market Hypothesis (EMH).
But practitioners need to beware as these theories may not apply exactly as written when it comes to the relationship between risk and return for individual equities. To state it concisely: If you’re investing in equities, you need to know that lower risk appears to produce the potential for higher returns in the long term. (We measure risk using the periodic standard deviation of stock prices.)