andvirðisáhættu

Andvirðisáhætta refers to the risk associated with holding assets whose value might decline due to factors other than general market movements. This concept is often contrasted with mark-to-market risk, which is the risk that the value of an asset will decrease due to a general decline in market prices. Andvirðisáhætta specifically addresses the potential for a decrease in the underlying value or earning capacity of an asset, irrespective of broader market conditions.

This type of risk can arise from various sources. For instance, a company might face andvirðisáhætta if its core business model becomes obsolete due to technological advancements, or if its products face increased competition leading to a permanent loss of market share. In the context of investments, it could relate to the specific operational, managerial, or industry-specific risks that affect the profitability and thus the intrinsic value of a particular security.

Managing andvirðisáhætta typically involves thorough due diligence, ongoing monitoring of the asset's fundamental drivers, and diversification across different industries and business models. It requires an understanding of the specific factors that contribute to the asset's value and the potential threats to those factors. Unlike market risk, which can be somewhat hedged through broader market instruments, andvirðisáhætta often necessitates a deeper analysis of the individual asset or entity.