market risk
Systematic investment exposure
Market risk is the possibility that an investment will lose value due to broad economic factors affecting financial markets as a whole—things like interest rate changes, currency fluctuations, or stock market downturns.
Unlike risks specific to a single company or asset, market risk cannot be eliminated through diversification because it affects all securities in a given market.
Financial professionals also call this systematic risk.
The fund's exposure to market risk increased during the volatility.
Greek alphabet's second letter
- standard deviationSpread around the mean
- volatilityRapid, unpredictable changeability
- correlationStatistical relationship measure
- deltaSymbol denoting variation
gamma · theta · vega · drawdown · skewness · stress testing · confidence interval · duration
Rapid, unpredictable changeability
- fluctuationIrregular change over time
- unpredictabilityState resisting forecasts
- instabilityTendency toward unpredictable change
- variabilityTendency to change
randomness · probability · likelihood · forecasting · prediction · speculation · random walk · regime change
Noncommittal maneuvering
- diversificationExpanding into varied areas
- asset allocationDistributing investments strategically
- stop-lossAutomatic sell trigger
- insuranceContractual risk coverage
derivatives · futures · options · swaps · forwards · collateral · netting
Sustained price level increase
- recessionProlonged economic decline
- interest ratesPrice paid for borrowing
- exchange ratesCurrency conversion values
- economic cycleRecurring market rise and fall
central bank · Fed · trade war · sanctions · pandemic · supply shock · commodity prices · black swan
beta
Greek alphabet's second letter
- standard deviationSpread around the mean
- volatilityRapid, unpredictable changeability
- correlationStatistical relationship measure
delta · gamma · theta · vega · drawdown · skewness · stress testing · confidence interval · duration · convexity
volatility
Rapid, unpredictable changeability
- fluctuationIrregular change over time
- unpredictabilityState resisting forecasts
- instabilityTendency toward unpredictable change
variability · randomness · probability · likelihood · forecasting · prediction · speculation · random walk · regime change · unknown unknowns
hedging
Noncommittal maneuvering
- diversificationExpanding into varied areas
- asset allocationDistributing investments strategically
- stop-lossAutomatic sell trigger
insurance · derivatives · futures · options · swaps · forwards · collateral · netting
inflation
Sustained price level increase
- recessionProlonged economic decline
- interest ratesPrice paid for borrowing
- exchange ratesCurrency conversion values
economic cycle · central bank · Fed · trade war · sanctions · pandemic · supply shock · commodity prices · black swan
- riskdownside, product liability, threat assessment, peril, hazard
- business riskscompetition, data breach, cyberattack, recession, lawsuit
- entrepreneurship riskventure capital, angel investors, capital loss, burn rate, runway
- investment metricsalpha, beta, return, yield, volatility
- market risksvolatility, systemic failure, financial crisis, contagion, credit crisis
- systemic risks
risk, market, risky, marketing, risked, supermarket, markets, marketplace, risks