What are the differences between systematic and unsystematic risk?
There are differences between the systematic and unsystematic risk though they are risk. Here are some of the differences presented : -
Systematic Risk | Unsystematic Risk |
This type of risk affects over all securities in a market. | This type of risk is unique to a security or a company. |
This risk is dependent of political or economic factors. | This risk is independent of political or economic factors. |
It is also known as Market Risk. | It is also known as Diversifiable Risk. |
This risk arises from management inefficiency, unsuccessful planning etc. | It occurs due to imbalance in the political situation or fluctuation in the market etc. |
It can be reduced by holding large number of securities. | It can be reduced by holding better portfolios of company’s securities. |
Source: Here.
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