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What Is Idiosyncratic Risk?

By Kristi WaterworthUpdated Jun 3, 2025 at 9:46 AM

Key Points

  • Idiosyncratic risk is unique to specific investments like companies or industries.
  • Systematic risk impacts all investments and is driven by macroeconomic factors.
  • Mitigate idiosyncratic risk by diversifying portfolio and choosing index funds.

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