Market risk is the risk that investors face while investing in securities. There are many factors that affect the performance of markets, such as economic conditions, political instability, etc., that collectively put the investors’ investment to make losses. The market risk is also called the unsystematic risk that cannot be avoided. The market risk affects the whole market and no company or institution is able to avoid it through diversification.
The other type of risk that is called the nonsystematic risk or company-specific risk can be avoided through diversification in a portfolio. Now the total risk includes both systematic and nonsystematic risk.
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In theory, market risk should be the only “relevant”
