In this video on Systematic Risk vs Unsystematic Risk, here we discuss key differences between Systematic and Unsystematic Risk along with infographics and comparison table.
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Systematic risk has no specific definition but is the inherent risk that exists in the stock market.
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Unsystematic risk is an industry or a company-specific threat for every type of investment. It is also known as “Specific Risk” or “Residual Risk.”
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#1 – Systematic risk is uncontrollable in nature since it includes large-scale and numerous factors. Whereas, unsystematic risk is controllable as it is limited to a specific section.
#2 – Systematic risk is broken down into 3 categories i.e. Interest rate risk, buying power risk and market risk. Whereas, Unsystematic Risk is divided into two main categories, business risk and financial risk.
#3 – Systematic risk can be controlled substantially by techniques such as hedging and allocation of assets. Whereas, diversification of a portfolio can eliminate unsystematic risk.
To know more about the ππ²π¬πππ¦πππ’π ππ’π¬π€ π―π¬ ππ§π¬π²π¬πππ¦πππ’π ππ’π¬π€, you can go to this π₯π’π§π€ π‘ππ«π:- https://www.wallstreetmojo.com/systematic-risk-vs-unsystematic-risk/
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