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InvestHub.com's
Finance Dictionary and Glossary of Investment Terms

idiosyncratic risk  

Definition 1.

The risk of price change due to the unique circumstances of a specific security, as opposed to the overall market. This risk can be virtually eliminated from a portfolio through diversification. also called unsystematic risk.
 

Definition 2.

Risk that affects a very small number of assets, and can be almost eliminated with diversification. Similar to unsystematic risk.
 

Definition 3.

Unsystematic risk or risk that is uncorrelated to the overall market risk. In other words, the risk that is firm-specific and can be diversified through holding a portfolio of stocks.
 
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