Non-diversifiable risk
InvestingDefinition
Same as systematic / market risk. Cannot be eliminated through diversification. This is the only kind of risk for which markets pay a return premium.
Equity beta, duration, credit spread are all non-diversifiable risk premia within their asset classes. Non-diversifiable risk across asset classes is the source of long-run wealth creation.
Equity beta, duration, credit spread are all non-diversifiable risk premia within their asset classes. Non-diversifiable risk across asset classes is the source of long-run wealth creation.