# Residual risk (diversifiable risk)

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- Post ID: 594811
- Modified: 2023-07-25T21:12:50+00:00
- Language: en

## Definition

Uncertainty that remains in relation to financial markets and cannot be eliminated by appropriate hedging strategies such as hedge transactions (exposure to loss remaining after other identified risks have been eliminated, hedged, factored in, or otherwise accounted for). - This uncertainty is typically caused by external shocks, such as the bankruptcy of a partner or a sovereign, with corresponding domino effects, i.e. the inevitable impact of such disruptions on one of the players in the financial markets is usually very rapid. - The risk that is unique to a single company such as a strike, the outcome of unfavorable litigation, or a natural disaster; this risk can be eliminated pretty much through diversification). - See formulas, financial mathematical, herd behavior, imponderables, price risk, special, liquidity crisis plan, natural event, reputational risk, risk, systemic, risk-bearing capacity, sovereign debt, denied, stress test, uncertainty, worst case scenario. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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