Nonsystematic Risk

Definition - What does Nonsystematic Risk mean?

Non systematic Risk is an investment risk that is specific to an issuer or an industry.

Testopedia explains Nonsystematic Risk

Often times the value of an investment will fluctuate with the market as a whole. If the market is generally declining the value of an investment may decline simply because the market as a whole is falling. This is known as systematic risk. Other times an investment may loss value as a result of problems with a specif company or industry. When the Government sued the tobacco companies or when a company faces a major issue these would be examples of non systematic risk. An investor may diversify out of non systematic risk.

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