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. Related: Systematic risk
The risk of price change for an individual stock, commodity, or industry. Anything from an oil discovery to a change in management could affect this sort of risk. Unsystematic risks are reduced or eliminated through diversification of holdings, not by hedging with index futures. Compare with systematic risk.
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