unsystematic

Unsymbolic is an adjective meaning not systematic. In finance, the term unsystematic risk (also known as diversifiable or idiosyncratic risk) describes risk that is specific to a particular asset or firm rather than to the market as a whole.

This type of risk arises from factors such as company-specific events, management decisions, product recalls, lawsuits, competitive dynamics, regulatory penalties, or supply chain disruptions. Because these factors are largely independent across assets, they can sometimes be offset by holding a diversified portfolio.

Systematic risk, by contrast, derives from broad macroeconomic factors such as inflation, interest rates, or geopolitical events and cannot be eliminated by diversification alone.

In portfolio theory, unsystematic risk declines as more uncorrelated assets are added, but the reduction is limited by correlations among assets. If assets move together, diversification cannot eliminate remaining risk, and what remains is largely systematic.

In statistics or research, unsystematic variation refers to random error or idiosyncratic factors affecting a single observation or outcome and not explained by the model, whereas systematic variation is explained by the model’s factors or design.

The concept highlights the limits of diversification and the importance of understanding asset-specific factors in risk assessment and investment strategy.