Risks In Stock Market
Risks In Stock Market
There are 2 Types Of Risks In Stock Market
There are 2 Types Of Risks In Stock Market
#1. Systematic
#1. Systematic
Risk is on the overall stock market and is not specific to any company or sector.
Risk is on the overall stock market and is not specific to any company or sector.
Eg: Covid-19, natural disasters, wars, etc
Eg: Covid-19, natural disasters, wars, etc
Systematic risk can be managed by diversifying in different asset classes and countries.
Systematic risk can be managed by diversifying in different asset classes and countries.
#2. Unsystematic
#2. Unsystematic
Risk which is specific to a company or stock.
Risk which is specific to a company or stock.
Eg: Yes Bank Failure, Jet Airways, etc
Eg: Yes Bank Failure, Jet Airways, etc
Unsystematic risk can be managed by diversifying in different stocks of the same sector.
Unsystematic risk can be managed by diversifying in different stocks of the same sector.
Total Risk in Stock market = Systematic Risk + Unsystematic Risk
Total Risk in Stock market = Systematic Risk + Unsystematic Risk
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