Systematic Risk
The risk inherent to the entire market or entire market segment.
Also known as "un-diversifiable risk" or "market risk." Investopedia Says:
Interest rates, recession and wars all represent sources of systematic risk because they affect the entire market and cannot be avoided through diversification. Whereas this type of risk affects a broad range of securities, unsystematic risk affects a very specific group of securities or an individual security. Systematic risk can be mitigated only by being hedged.
Even a portfolio of well-diversified assets cannot escape all risk. Related Terms:
100% Equities Strategy
Assymetric Volatility
Capital Asset Pricing Model - CAPM
Diversification
Granular Portfolio
Home Bias
Macro Risk
Market Risk
Roll's Critique
Unsystematic Risk |