Company-specific risk(redirected from Company Specific Risk)
Related: Unsystematic risk
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
An unsystemic risk specific to a certain company's operations and reputation. For example, if a widget wholesaler has only one supplier and the supplier goes bankrupt, this could greatly impact the wholesaler's sales, profits, and other operations. Also, a company may have a bad reputation, making their operations difficult in a certain area. For example, a company that refuses to hire union workers might prove unprofitable if it opens a branch in a strongly pro-union town. Company-specific risks are difficult to quantify and thus qualitative analysis is needed to determine their natures and likelihoods. They may be reduced by appropriate diversification.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved