How are volatility and risk related in an investment?

Risk refers to the chances of losing money on an investment. Volatility refers to an investment's likelihood to fluctuate in value. At first glance it would seem that risk and volatility are positively correlated. However, this tends to be true over short timescales. For example, the stock market is more volatile than currency-based investments, but over long time periods the stock market is actually less risky than currency-based investments. This has to do with the fundamentals underlying stocks being stable while the people trading them are emotionally volatile, leading to large upward and downward swings in value.