System risk

Also called market risk, it is not due to the specific characteristics of a security, but depends on generic factors that affect the evolution of prices in the securities markets (general economic situation, political news, etc.). This risk cannot be controlled or reduced through diversification, as it is due to factors that impact on the market as a whole (in general, it is considered to be the minimum risk attainable through portfolio diversification).

It is called market risk because it is the indicator of the aggregate risk of all the companies listed on it, referring to a specific period of time. To estimate the systematic risk of a market at a later stage, a measurement of the risk of its indexes is usually carried out, through the standard deviation of the historical series of such indicators.