nondiversifiable risk


Risk which is common to an entire class of assets or liabilities. The value of investments may decline over a given time period simply because of economic changes or other events that impact large portions of the market. Asset allocation and diversification can protect against nondiversifiable risk because different portions of the market tend to underperform at different times. also called systematic risk or market risk.

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You should try and figure out a way to lower your nondiversifiable risk that you do not have to much liability.

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My hedge fund manager indicated that he believed all corporate bonds as a class have nondiversifiable risk that he cannot avoid no matter how many different companies he invests in.

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nondiscretionary trust non-diversified management company