unsystematic 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.

Use unsystematic risk in a sentence

We were taking an unsystematic risk and I was worried that things might go wrong for us in the future.

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Don didn't consider the unsystematic risk associated with investing all of his money in a company that made monochrome monitors.

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The type of risk which is attributed to an individual investment and is not attributable to external factors (market risk or "beta" risk), is called unsystematic risk.

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diversifiable risk systematic risk