Systematic risk

From Financial Literacy Wiki

Systematic risk are risk that cannot be reduced, not even diversification. Usually it refers to events or changes that affect the whole financial system or economy as a whole.

Non-systematic risk are events or changes that are normally associated with the industry(e.g. business cycles, technology advancements) or company specific(e.g. leaving of key management personnel, company fraud). Such risk can be reduced by taking appropriate diversification strategy.