Systematic Vs Unsystematic Risk Explained In 5 Minutes

[@RyanOConnellCFA]

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[@speedyturtle1234]

Your explanations are PERFECT!!! Easy to understand and putting them into context absolute sense

[@RyanOConnellCFA]

I really appreciate the kind feedback! Thank you so much

[@phillipjustineobaate4167]

Great teacher, teaching from known to unknown, simply.

[@RyanOConnellCFA]

Really appreciate it Phillip!

[@user-yj6jv8ef1x]

SAVED ME A LOT OF TIME! THANKYOU

[@elenakotseva7905]

life saver thank you!

[@Frank_Ammerlaan]

Systematic risk can be diversified away by investing smaller amounts over time 😊 Thank you for your videos.

[@RyanOConnellCFA]

My pleasure Frank!

[@ernestnjodzeven9009]

Thanks so much. Simple and easy to grasp

[@RyanOConnellCFA]

My pleasure Ernest

[@kuchikirukya6094]

Great video, thanks for your lecture!

[@RyanOConnellCFA]

Absolutely, I'm glad you enjoyed it Lidia!

[@oceanman7290]

This is a gem. Thank you man!

[@RyanOConnellCFA]

You're welcome!

[@sandeepmathur3330]

Brilliant explanation. Thank you !

[@RyanOConnellCFA]

Glad it was helpful!

[@user-qh4vj7wo8m]

thank you sir

[@RyanOConnellCFA]

My pleasure!

[@newsjohnson]

Curious. Do you mean 30 securities as in 30 ETFs, 30 single stocks, or 30 assets including real estate and other investments? Thanks.

[@RyanOConnellCFA]

I specifically mean 30 single stocks in this example! An ETF would typically have a lot of unsystematic risk diversified away due to the fact it contains a ton of different securities

[@JackLyman2001]

Thanks!

[@misterpk92]

Solid vid Ryan

[@RyanOConnellCFA]

Thank you for the support and have a good weekend

[@vikramjeetsingh8889]

Thanks

[@RyanOConnellCFA]

My pleasure

[@chanshimusonda961]

Great Video

[@investoracademy8173]

absolutely on point! Love it, thank you! :)

[@RyanOConnellCFA]

You're so welcome!

[@kanchithakkar8471]

Thank you so much

[@RyanOConnellCFA]

You're most welcome

[@enish27]

Can you make clips on how to take advantage of CFA after mid-30s w/o financial career background?

[@RyanOConnellCFA]

Thats an interesting idea for a video and I'll consider it. I'll see if I can find anyone who was in this situation before to ask them about this topic

[@enish27]

@@RyanOConnellCFA Thanks for consideration!

[@RyanOConnellCFA]

@@enish27 Absolutely!

[@mamadoubarry3743]

Would it be correct to think of unsystematic risk as similar to the volatility of one individual asset while systematic risk is basically the same thing as beta?

[@RyanOConnellCFA]

Yes, beta is the same as systematic risk. As for unsystematic risk you're assumption is a little off. If you buy one stock: Total Risk = Systematic Risk + Unsystematic Risk So you have inherent market risk even when you just buy one stock (which is the systematic risk). Then on top of that you also have risk exposure to that one specific company (unsystematic risk)

[@gauravbhayana4626]

can systematic risk be diversified by alternative investments or not because beta is market risk and alternative investments are non market illiquid investments right ?

[@RyanOConnellCFA]

Lets say you had a portfolio that had public equities in it. If you add alternative investments into it, it should diversify the risk of the portfolio because alternatives have a low correlation with public equities. I'm not entirely sure how it would impact systematic risk though, because usually systematic risk is discussed in the context of public equities

[@gauravbhayana4626]

similiar question i saw in one of cfa schwezer mocks which of the following will be least appropriate for measuring risk of alternative investments sortino ratio value at risk systematic risk and th ans was systematic risk with the justification that systematic risk relates to market securities not non market securities but logically systematic risks like disaster , pandemic , intertest risk should affect all companies whether it is public or private right so it could not be possible that systematic risks only affect public securities . since your are a cfa i wanted to ask you this doesnt make sense to me , please please let me know i am preparing for cfa lvl 1

[@RyanOConnellCFA]

@@gauravbhayana4626 I think it makes sense. Systematic risk is typically considered the broad public equities market risk, so it may not be useful to look at with alternative investments. Typically Schwesers questions can be more ambiqious and confusing than those on the actual CFA exam. I don't thtink you'd see a question like that on the real test