Magic Stacking
Powerful magic spells and magic items cannot be stacked, not because it is volatile, but because it is the very nature of magic to dissipate under such circumstances. Like water heated to its boiling point, lesser enchantments simply evaporate when a greater one is present. Two smaller magics can build together, but when power grows past the threshold, the weaker effects fade away, leaving only the strongest enchantment behind.
Destination Stacking
No more than 2 magical effects (spells or items) can apply to the same destination. A destination is any single stat or value, such as AC, attack bonus, damage bonus, a specific Save Roll, a skill, an ability score, etc. All versions of the same thing count as the same destination. This limit also applies to area effects.
Spell and Magic Limitations
Within a destination, you can benefit from up to 2 modifiers, but only if each one is +2 or lower.
If any single modifier to that destination is +3 or higher, only that highest modifier applies and nothing else stacks with it for that destination.
This rule also applies to penalties, not just bonuses.
Examples of Stat Stacking
A spell +2 AC and an amulet +1 AC stack for a total of +3 AC. Two effects of +2 or lower to the same destination can stack.
A spell +3 AC and a ring +2 AC do not stack. You get only +3 AC total. The +3 effect suppresses the smaller one.
You cannot use a potion +2 AC, a spell +2 AC, magic armor +2 AC, and a magic sword +1 AC all to AC. That is 4 effects trying to reach the same destination. Only 2 may apply. If more than 2 effects would apply, the creature chooses which 2 apply. Max allowed is 2 magical effects per stat if none are +3 or higher.
A potion of +4 Constitution and a spell +3 Constitution do not give +7 Constitution. You take only +4 Constitution, since a modifier of +3 or higher blocks other stacking on that destination.