systematic 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 systematic risk because different portions of the market tend to underperform at different times. also called market risk.

Use systematic risk in a sentence

You need to make sure that you calculate all of the systematic risk and do your best to avoid it going wrong.

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While we knew it was a systematic risk, it was still enough of a lingering worry to keep our outlook conservative.

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The systematic risk was so widespread, that we were exposing ourselves to significantly more risk than we had planned on.

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undiversifiable risk Arbitrage Pricing Theory