Definition of Unsystematic risk:
Unsystematic risk is unique to a specific company or industry. Also known as “nonsystematic risk,” "specific risk," "diversifiable risk" or "residual risk," in the context of an investment portfolio, unsystematic risk can be reduced through diversification.
Popular but erroneous term for non-systemic risk.
This can be contrasted with systematic risk, which is inherent in the market.
How to use Unsystematic risk in a sentence?
- Unsystematic risk, or specific risk, is that which is associated with a particular investment such a company's stock.
- Unsystematic risk can be mitigated through diversification, and so is also known as diversifiable risk.
- Once diversified, investors are still subject to market-wide systematic risk.
Meaning of Unsystematic risk & Unsystematic risk Definition