Systematic risk is driven by external factors, while unsystematic … Continue reading → The post Systematic Risk vs. Unsystematic Risk appeared first on SmartAsset Blog.

Unsystematic risk can pose a threat to your investment portfolio. Discover what it is and how to protect yourself against it in this informative post.

Beta is a way to quantify a stock’s systematic risk. In simple terms, systematic risk refers to investment risk related to the movement of the entire market. Beta can help you answer questions like, ...

The Treynor ratio employs beta and measures returns relative to the amount of systematic risk the portfolio carries. The Sharpe ratio looks at standard deviation and accounts for unsystematic risk.

Importance of Portfolio Diversification for Risk Reduction Portfolio diversification can lower overall investment risk, which can be categorized into unsystematic risk and systematic risk.

When investing, there are two principle types of risk: systematic risk and unsystematic risk. Unfortunately, you can deal with the latter only through diversification.