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Market risk comes in two parts. The first part of market risk lies in the interdependence of all stocks. Although it is true that the value of each stock is independent, the reality is that all stocks in the market share one thing in common—they are all on the market together. As such, it is impossible to disregard the effect that the overall movement of the market has on your individual stock.
Tip
Market risk is the danger that your stock's performance will be skewed as a result of the conditions of the markets in which it trades.