Unsystematic Risk
Definition of '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," "diversifiable risk" or "residual risk." |
|
Investopedia explains 'Unsystematic Risk'For example, news that is specific to a small number of stocks, such as a sudden strike by the employees of a company you have shares in, is considered to be unsystematic risk. |
Related Definitions
Articles Of Interest
-
Building An All-ETF Portfolio
Balance is the key when selecting an all-ETF portfolio that will hedge against market volatility. -
Protect Your Foreign Investments From Currency Risk
Hedging against currency risk can add a level of safety to your offshore investments. -
Understanding Volatility Measurements
How do you choose a fund with an optimal risk-reward combination? We teach you about standard deviation, beta and more! -
The Capital Asset Pricing Model: An Overview
CAPM helps you determine what return you deserve for putting your money at risk. -
Modern Portfolio Theory: Why It's Still Hip
See why investors today still follow this old set of principles that reduce risk and increase returns through diversification. -
Achieving Optimal Asset Allocation
Minimizing risk while maximizing return is any investor's prime goal. The right mix of securities is the key to achieving it. -
Determining Risk And The Risk Pyramid
Many investors do not understand how to determine the level of risk their individual portfolios should bear. -
What is the difference between systemic risk and systematic risk?
Systemic risk is generally used in reference to an event that can trigger a collapse in a certain industry or economy, whereas systematic risk refers to overall market risk. Systemic risk does ... -
Random Reinforcement: Why Most Traders Fail
This phenomenon can cause a trader to abandon a proven strategy or risk everything on chance. Find out how to avoid it. -
Introduction To Treasury Inflation-Protected Securities (TIPS)
If you want to protect your portfolio from inflation, all you need are a few TIPS.
Free Annual Reports