Market Risk

Filed Under »
Dictionary Says

Definition of 'Market Risk'

The day-to-day potential for an investor to experience losses from fluctuations in securities prices. This risk cannot be diversified away.

Also referred to as "systematic risk".
Investopedia Says

Investopedia explains 'Market Risk'

The beta of a stock is a measure of how much market risk a stock faces.

Related Definitions

  •

    Beta

    A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that ...
    Read More »

  • Risk

    The chance that an investment's actual return will be different than expected. Risk includes the possibility of losing some or all of the original investment. Different versions of risk ...
    Read More »

  • Systematic Risk

    The risk inherent to the entire market or entire market segment. Also known as "un-diversifiable risk" or "market risk."
    Read More »

    • Unsystematic Risk

      Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through appropriate diversification. Also known as "specific risk", ...
      Read More »

    • Diversification

      A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments ...
      Read More »

    • Home Bias

      The tendency for investors to invest in a large amount of domestic equities, despite the purported benefits of diversifying into foreign equities. This bias is believed to have arisen as ...
      Read More »

    • Asset Quality Rating

      A review or evaluation assessing the credit risk associated with a particular asset. These assets usually require interest payments - such as a loans and investment portfolios. How ...
      Read More »

    • Conditional Value At Risk - CVaR

      A risk assessment technique often used to reduce the probability a portfolio will incur large losses. This is performed by assessing the likelihood (at a specific confidence level) that ...
      Read More »

    • Operational Risk

      A form of risk that summarizes the risks a company or firm undertakes when it attempts to operate within a given field or industry. Operational risk is the risk that is not inherent in ...
      Read More »

    • 100% Equities Strategy

      An investment strategy for an individual portfolio or pooled funds vehicle such as a mutual fund. Only equity securities are considered for investment, whether they be listed stocks, ...
      Read More »

Articles Of Interest

Sponsored links
Hot Definitions
Partner Links
Suggested Definitions