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Systematic risk and unsystematic risk 1) when total risk assume to be equal to standard deviation of portfolio Systematic risk= B × standard deviation of market portfolio And unsystematic risk = standard deviation of portfolio - syetamatic risk ( i.e total risk - systamatic risk)


the simple answer is to make an adjustment to the beta of company. let me give you an example say, beta is 1.0 & correlation of the company with market is 0.5 (which is 50% of the movement in the prices is explained by the market and rest is because of some other reason). so, now one thing is clear that if we some how make this correlation equals to 1 ...

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