Total Risk=systematic risk + unsystematic risk
Unsystematic risk
it is unique Or company risk & can be diversified away. Specific risk is the risk associated with individual assets - within a portfolio these risks can be reduced through diversification (specific risks "cancel out").
Systematic risk
It is market risk & cannot be diversified away. only it is relevant in portfolios. Systematic risk, or market risk, refers to the risk common to all securities.
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