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Definition of 'Systematic Risk'
The risk inherent to the entire market or entire market segment.
Also known as "un-diversifiable risk" or "market risk."
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Investopedia explains 'Systematic Risk'
Interest rates, recession and wars all represent sources of systematic risk because they affect the entire market and cannot be avoided through diversification. Whereas this type of risk affects a broad range of securities, unsystematic risk affects a very specific group of securities or an individual security. Systematic risk can be mitigated only by being hedged.
Even a portfolio of well-diversified assets cannot escape all risk.
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See why investors today still follow this old set of principles that reduce risk and increase returns through diversification.
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Learn about the different kinds of risk that investors must face.
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Increase your returns by creating the right balance of both these risk measures.
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If you think holding a few different stocks is enough, you may be in for an unpleasant surprise.
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CAPM helps you determine what return you deserve for putting your money at risk.
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The consumption capital asset pricing model smoothes over some of CAPM's weaknesses to make sense of risk aversion.
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Many investors do not understand how to determine the level of risk their individual portfolios should bear.
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Reduce your stock portfolio's risk by trading with foreign currencies.
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Without this risk-reduction technique, your chance of loss will be unnecessarily high.
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If you diversify too much, you might not lose much, but you won't gain much either.
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