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specific risk

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Financial Dictionary

Specific Risk

Risk that affects a very small number of assets. This is sometimes referred to as "unsystematic risk."

Investopedia Commentary

An example would be news that is specific to either one stock or a small number of stocks, such as a sudden strike by the employees of a company you have shares in or a new governmental regulation affecting a particular group of companies.

Unlike systematic risk or market risk, specific risk can be diversified away.

Related Links

Financial Concepts
The Importance Of Diversification

See also: Diversification, Market Risk, Risk, Systematic Risk, Unsystematic Risk

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