Specific Risk

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Dictionary Says

Definition of 'Specific Risk'

Risk that affects a very small number of assets. Specific risk, as its name would imply, relates to risks that are very specific to a company or small group of companies. This type of risk would be the opposite of an overall market risk, or systematic risk.

Sometimes referred to as "unsystematic or diversifiable risk."

Investopedia Says

Investopedia explains 'Specific Risk'

An example of specific risk would be news that is specific to either one stock or a small number of stocks, such as a sudden strike by the employees of a company, or a new governmental regulation affecting a particular group of companies. Unlike systematic risk or market risk, specific risk can be diversified away.
Search results for

'Specific Risk'

  • What are the components of the risk premium for investments?

    http://www.investopedia.com/ask/answers/05/componentsriskpremium.asp
    ... The five main risks that comprise the risk premium are business risk, financial
    risk, liquidity risk, exchange-rate risk and country-specific risk. ...

  • Mitigate Your Equity Risk

    http://www.investopedia.com/articles/stocks/08/mitigating-risk.asp
    ... Statistical analysis demonstrates that by holding about 30 stocks, you can diversify
    away company-specific risk and be left with the systematic risk exposure ...

  • Finding Fortune In Foreign-Stock ETFs

    http://www.investopedia.com/articles/mutualfund/06/foreignETFs.asp
    ... Foreign Economic Risk Factors Other factors to consider when choosing specific
    foreign-stock ETFs for your portfolio include country-specific risk and the ...

  • Stock Ratings: The Good, The Bad And The Ugly

    http://www.investopedia.com/articles/analyst/03/012103.asp
    ... everything. A company's risk profile ("specific risk" in Street talk) changes
    over time as the result of internal changes (eg. management ...

  • The Capital Asset Pricing Model: An Overview

    http://www.investopedia.com/articles/06/CAPM.asp
    ... Advertisement - Article continues below. Modern portfolio theory shows
    that specific risk can be removed through diversification. ...

  • The Capital Asset Pricing Model: An Overview

    http://www.investopedia.com/articles/06/capm.asp
    ... Advertisement - Article continues below. Modern portfolio theory shows
    that specific risk can be removed through diversification. ...

  • Modern Portfolio Theory: Why It's Still Hip

    http://www.investopedia.com/articles/06/MPT.asp
    ... Unsystematic Risk - Also known as "specific risk", this risk is specific to individual
    stocks and can be diversified away as you increase the number of stocks ...

  • What is the difference between a global fund and an international ...

    http://www.investopedia.com/ask/answers/03/071103.asp
    ... Global funds are chosen primarily by investors who wish to diversify against
    country-specific risk without excluding their own country. ...

  • How Basel 1 Affected Banks

    http://www.investopedia.com/articles/07/BaselCapitalAccord.asp
    ... Market risk includes general market risk and specific risk. The general market risk
    refers to changes in the market values due to large market movements. ...

  • Financial Funds Provide Diversity ... And Risk

    http://www.investopedia.com/articles/mutualfund/08/sector-fund-financial.asp
    ... These funds let you pick an individual sector in which to invest, and avoid some
    of the company-specific risk that comes with picking individual stocks. ...

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