General

Unsystematic Risk

Risk that is specific to a single company or industry, as opposed to systematic risk that affects the entire market. A product recall, CEO scandal, or patent loss are all examples of unsystematic risk. Modern portfolio theory holds that unsystematic risk can be virtually eliminated through diversification -- owning 20 to 30 uncorrelated stocks typically removes most company-specific risk from a portfolio.

Join the Edge

Stop watching.
Start winning.

50,000+ traders get our daily brief before the market opens.

Free. No spam. Unsubscribe anytime.

Traders Agency What Customers Say
4.8
1,278
4.7
686
Hi, I'm GENTSY