Nonsystematic risk

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Nonsystematic risk

Nonmarket or firm-specific risk factors that can be eliminated by <>. Also called unique risk or . Systematic risk refers to risk factors common to the entire economy.

Nonsystematic Risk

Risk that is unique to a certain asset or company. An example of nonsystematic risk is the possibility of poor earnings or a strike amongst a company's employees. One may mitigate nonsystematic risk by buying different of securities in the same industry and/or by buying in different industries. For example, a particular oil company has the diversifiable risk that it may drill little or no oil in a given year. An investor may mitigate this risk by investing in several different oil companies as well as in companies having nothing to do with oil. Nonsystematic risk is also called diversifiable risk. See also: Undiversifiable risk.

Nonsystematic risk.

Nonsystematic risk results from unpredictable factors, such as poor management decisions, successful competitive products, or suddenly obsolete technologies that may affect the securities issued by a particular company or group of similar companies.

Portfolio diversification, which means spreading your investment among a number of asset subclasses and individual issuers within those subclasses, can help counter nonsystematic risk.

References in periodicals archive ?
Bera and Mia (3) address the uncertainty over use of nevirapine (NVP)based antiretroviral therapy in pregnancy, following an advisory issued in 2005 by the US Food and Drug Administration that HIV-infected women with CD4 counts [greater than or equal to] 250 cells/[micro]l were at particular risk of developing hepatotoxicity.
Handguns pose particular risk to women and children, and the research suggests that the statutes challenged in this case may prevent a substantial number of firearm deaths and injuries.
Nurses are at particular risk from the disinfectant gluteraldehyde and the sterilizing agent ethylene oxide.
Genesis has exited the market, and Quanta, which wrote coverage in this space, has been so dangerously downgraded that you have to pay close attention to the viability of them on your particular risk," he said.
Hilda Solis, D-El Monte, argued that Latino seniors are at particular risk of missing the May 15 cut-off date because of language and cultural barriers.
Infection with HIV, the AIDS virus, puts people at particular risk from pneumococcus, so researchers in several states collected 6 years' worth of data on severe pneumococcal infections among adults with HIV.
The meeting will be attended by all of the force's Community Relations Officers and the focus will be on those who live on outer estates and may be at particular risk of homophobia.
Young people who abuse steroids are at particular risk because the drugs harm physical development.
Tanning lamps pose a particular risk, says Karagas, "because [they] mimic sunlight and provide such an intense, concentrated dose of ultra-violet (UV) rays.
34 targeted notifications to groups at particular risk from an offender.
Pregnant women and children could be at particular risk for any bone mineralization problem.
Ask your physician whether you are at particular risk because of medication.