One formula reduced an investment's risk to a single number versus the whole market
William Sharpe's Capital Asset Pricing Model argues an asset's expected return depends mainly on its 'beta,' how much it swings relative to the overall market, since investors can diversify away risk specific to one company for free. A stock swinging twice as hard as the market should, on average, earn roughly twice the market's risk premium; anything else is mispricing. Sharpe shared the 1990 Nobel Memorial Prize in Economics partly for this, and CAPM remains standard for pricing risk.