Systematic risk, also known as “market risk” or “un-diversifiable risk”, is the doubt inherent to the entire market. Also brought up to as volatility systematic risk consists of the day-to-day fluctuations in a stock’s price. Volatility is a criterion of risk because it refers to the behavior, or “temperament,” of your investment rather than the reason for this behavior. Because market movement is the cause why people can make money from stocks, volatility is essential for returns, and the more unstable the investment the more chance there is that it will experience a dramatic change in either direction.
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