Unsystematic risk
A risk which is unique to a company, such as strikes, or a natural catastrophe, which does not impact the whole market is an unsystematic risk.
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Unsystematic risk
Definition:
Also called the diversifiable risk or residual risk.
Unsystematic Risk is also called the diversifiable risk, residual risk, or company-specific risk, the risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe. Related: Systematic risk.
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".
Unsystematic risk
Also called the diversifiable risk or residual risk. The risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe that can be eliminated through diversification.
Unsystematic risk, what is it and how to reduce it
Unsystematic risk also known as diversifiable risk or residual risk is something that every investment comes with. There is nothing that can eliminate this risk completely, but it can be reduced.
Unsystematic risk : Risk that is company specific and can be eliminated through diversification (thus also known as diversifiable risk).
Unsystematic risk The risk attached to a particular security, independent of the movement of the market (as opposed to "systematic risk" or "market risk, " which refers to the risks attached to the movements of the overall market).
See unsystematic risk.
Learn more about diversifiable risk
» diversifiable risk business definition ...
Related: Unsystematic risk
Consensus forecast
The mean of all financial analysts' forecasts for a company.
Residual risk Related: Unsystematic risk Retail investors individual investors Institutional investors. Retention rate The percentage of present earnings held back or retained by a corporation.
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.
Finally, I'd rather own 15 stocks I know backward and forward than an ETF that keeps shifting stocks back and forth. With 15 stocks from various sectors, you've already reduced unsystematic risk.
Diversification-
Investing in a basket of shares with different risk-reward profile and correlation so as to minimize unsystematic risk.
Discounted payback period
Period in which future discounted cash in- flows equal the initial outflow.
Risk that affects a very small number of assets, and can be almost eliminated with diversification. Similar to unsystematic risk.
A ratio used to measure the quality of a fund's investment picking ability. It compares the fund's alpha (or the adjusted return of the fund assuming the market return is zero) to the portfolio's unsystematic risk or residual standard deviation.
Undermargined Account, Undersubscription, Undervalued Shares, Underwriter, Unissued Share Capital, Unit Trust of India or UTI, Unlisted Share, Unlisted Shares, Valuation of, Unloading, Unmatched Transactions, Unofficial Premium, Unsystematic Risk, ...
If this is not the case, portfolios with identical systematic risk, but different total risk, will be rated the same. But the portfolio with a higher total risk is less diversified and therefore has a higher unsystematic risk which is not priced in ...
This type of risk, associate with the market or market segments differs from the risk accompanying stocks in that systematic risk effects a broad range of securities whereas unsystematic risk affects a very specific group of securities or individual ...
Diversifiable riskRelated: Unsystematic risk Dividend discount model (DDM)A model for valuing the common-stock of a company, based on the present value of the expected cash flows.
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...
 See also: Systematic risk, Stock, Market, Risk, Trading
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