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Glossary - Systematic Risk

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Learning: Knowledge

Systematic Risk, also known as aggregate risk, is risk that exists within a market or market segment as a whole. It is also referred to more generally as volatility, and affects the market overall, rather than individual stocks or sectors. Investors cannot avoid systematic risk through methods such as diversification. Major weather events and other disasters may constitute systematic risk, and so this type of risk cannot be avoided or predicted. This type of risk can have broad implications, including wide-ranging impacts on returns, resource holdings, and income.

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