Difference Between Systematic Risk vs Unsystematic Risk

Market-wide systemic shocks vs. company-specific hazards

Affects the entire market as a whole: Cannot be diversified away.
Caused by: Macroeconomic changes, political events, interest rate shocks, or natural disasters.
Example: A global pandemic or financial meltdown.

Affects a specific company or industry: Can be minimized through proper portfolio diversification.
Caused by: Corporate scandals, management failures, supply chain breakdowns, or strikes.
Example: A localized factory strike or software glitch.