Systematic risk

Systematic risk
Definition: [crh] Also called undiversifiable risk or market risk.

Systematic risk and beta
Systematic risk is overall market risk as applied to a particular stock. It cannot be diversified against in a portfolio.

Systematic Risk The portion of risk or variability that is caused by factors, which affect the returns on all securities.

Systematic Risk - The risk inherent to the entire market or entire market segment.
Also known as "un-diversifiable risk" or "market risk."
Financial Terms (S)
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Systematic risk
The risk that derivatives permit the transmission of risk across previously unrelated markets, thus making it more likely that a large shock in one will be transmitted to others.

Systematic Risk:
Any uncertainty that affects the whole market such as political, social and economic decisions.
Systematic Withdrawal Plan: ...

Systematic risk
The systematic risk is the portion of the risk that relates to the movements in the underlying market of which this asset forms part. Systematic risk is normally measured in terms of beta.

Systematic risk
The RISK that remains after DIVERSIFICATION, also known as market risk or undiversifiable risk. It is systematic risk that determines the RETURN earned on a well-diversified portfolio of ASSETS.
Systemic risk ...

Systematic risk
Systematic risk, also called market risk, is risk that's characteristic of an entire market, a specific asset class, or a portfolio invested in that asset class.

systematic risk the level of risk in asset markets that investors cannot reduce by diversification. (13)

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Systematic Risk. See market risk
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T-Bill (Treasury Bill) Common term for a government treasury bill, which is a short-term government debt issue. Debt issued by the U.S. Treasury with maturity less than a year.

Systematic Risk
A non-controllable, non-diversifiable risk that is common to all investments within a given asset class. With equities it is called market risk, with fixed income securities it would be interest rate risk.

Systematic risk
Also called undiversifiable risk or market risk.
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Systematic Risk
Systematic risk is also known as market risk and relates to factors that affect the overall economy or securities markets.

systematic risk That component of an instrument or portfolio's market risk that is correlated with the overall market.
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Systematic Risk: Risk associated with the market, which cannot be diversified away. Also known as non-diversifiable risk (as measured by an asset's beta).
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Nonsystematic risk
Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk or diversifiable risk. Systematic risk refers to risk factors common to the entire economy.

Nonsystematic risk
Nonsystematic risk results from unpredictable factors, such as poor management decisions, successful competitive products, ...

Non-systematic risk: Risk that an individual stock or bond will perform badly as compared to the market. Diversification effectively eliminates this risk.

[edit] Systematic risk and specific risk
Specific risk is the risk associated with individual assets - within a portfolio these risks can be reduced through diversification (specific risks "cancel out").

Systematic risk principle
Only the systematic portion of risk matters in large, well-diversified portfolios. The expected returns must be related only to systematic risks.

Systematic Risk
Risk that is common to all securities of the same class (stocks, bonds, options)--also known as "market risk". This risk cannot be eliminated by diversifying one's portfolio.
See: Diversification; Market Risk; Risk ...

Systematic risk is risk that can not be diversified away from a given portfolio and usually consists of economy-wide factors.
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Systematic risk, also known as market risk, is the risk that's inherent in, or characteristic of, a particular type or class of security, such as stocks or bonds, as opposed to the risks posed by an individual security of that type.

Systematic risk (non-diversifiable risk)
Risk that affects a security or portfolio due to its relationship with the market. Also known as market risk. The measure of systematic risk is the beta coefficient.

Systematic Risk
The risk, in a portfolio, that cannot be diversified away because it reflects the degree to which the value of the assets in the economy move in together.

Related: Systematic risk
Unemployment rate
The ratio of the number of people classified as unemployed to the total labor force.

Related: Systematic risk
Unearned income (revenue)
Income received in advance of the time at which it is earned, such as prepaid rent.

Related: Unsystematic risk
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
charge but agree to pay all operating and financing charges of the project.

See: Risk; Systematic Risk
Market Timing
Determination of when to buy or sell securities through use of fundamental or technical indicators.

Also called systematic risk. The risk that an overall market or asset class will change in value according to economic conditions or other factors that may override any characteristics specific to a particular stock, bond, commodity or currency.

Because the unsystematic risk is diversifiable, the total risk of a portfolio can be viewed as beta.
The market portfolio ...

un-systematic risk/diversifiable risk/specific risk The risk of price change due to the unique circumstances of a specific security, as opposed to the overall market. This risk can be virtually eliminated from a portfolio through diversification.

unsystematic risk The risk of price change due to the unique circumstances of a specific security,... unwind Unwinding a trade refers to action of cancelling out an earlier position with...

You can mitigate systematic risks by hedging your positions with non-correlated assets (much harder to do than most think) or employ good stop management techniques to preserve your capital.

The CAPM asserts that the only risk that is priced by rational investors is systematic risk, because that risk cannot be eliminated by diversification.

The estimated slope is the measurement of the reward for bearing systematic risk during the period analyzed. Secondary distribution/offering Used in the context of general equities.

Idiosyncratic Risk Unsystematic risk or risk that is uncorrelated to the overall market risk. In other words, the risk that is firm-specific and can be diversified through holding a portfolio of stocks.

Principle of diversification That portfolios of different sorts of assets differently correlated with one another will have negligible unsystematic risk.

Principal of diversification Highly diversified portfolios will have negligible unsystematic risk. In other words, unsystematic risks disappear in portfolios, and only systematic risks survive.

From an economic point of view, risk can take on diverse forms; the risk of bankruptcy, exchange, maturity, country, systematic and non-systematic risk. Each of these categories of risk has its own specific field of application.

Systematic risk: risk affecting an entire business or industry, not just one company.

Related: Unsystematic risk
Residuals
(1) Part of stock returns not explained by the explanatory variable (the market index return). Residuals measure the impact of firm-specific events during a particular period.

The desired portfolio beta (exposure to systematic risk) of a plan sponsor. For example, since the investment guideline for Wells Fargo stipulates an equity beta range of.9 to 1.

] According to asset pricing theory, beta represents the type of risk, systematic risk, that cannot be diversified away.

The CAPM details why every investment contains two distinct risks, the systematic risk due to being in the market, and the unsystematic risk of a company's operations, and how they should be assessed in terms of individual securities and portfolios.

COMPANY-SPECIFIC RISK - Related: Unsystematic risk
COMPARABILITY - is the quality or state of being similar or alike.
COMPARABLE - a publicly traded company with similar characteristics to a private company that is being ...

See also: CAPM, CML, Systematic Risk, Volatility, Weighted Average Cost of Capital - WACC
? Mentioned in
Aggressive Growth Fund
Alpha
Beta equation
Capital Market Line - CML
Characteristic portfolio ...

Market Risk: Also called systematic risk. The portion of a security's risk common to all securities in the same asset class, and that cannot be eliminated through diversification.
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Sum of the differences between the expected return on a stock (systematic risk multiplied by the realized market return) and the actual return often used to evaluate the impact of news ona stock price.

Because a market portfolio is completely diversified, it is subject only to systematic risk (risk that affects the market as a whole) and not to unsystematic risk (the risk inherent to a particular asset class).

How Many Stocks Diversify Unsystematic Risk?
5
Non-Market Risk and a Concentrated Portfolio ...

Diversifiable Risk definition :
Related: Unsystematic risk
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Portfolio Analysis - Is the methodology which quantified systematic and nonsystematic risk for investment holdings. Harry Markowitz is considered the primary influence in this field.

A statistical term used to illustrate the relationship of the price of an individual security or mutual fund unit to similar securities or financial market indexes. Put another way, a measure of the volatility, or systematic risk, ...

Dividing investment funds among a variety of securities with different risk, reward, and correlation statistics so as to minimize unsystematic risk.
Dividend ...

According to this model, prices are determined in such a way that risk premiums are proportional to systematic risk as measured by the beta coefficient. As such, the CAPM provides an explicit expression of the expected returns for all assets.

Also called undiversifiable risk or market risk, the minimum level of risk that can be obtained for a portfolio by means of diversification across a large number of randomly chosen assets. Related: unsystematic risk
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Market Risk: The uncertainty of economic, social; or political events that would result in an investment's decrease in value. Since these events usually affect the entire market, market risk is called systematic risk.

The premise underlying the Treynor ratio is that systematic risk--the kind of risk that is inherent to the entire market (represented by beta)--should be penalized because it cannot be diversified away.

See also: Expected return, Expense, Banks, Values, Asset pricing model