An element of risk (specifically, price risk) that is diversifiable (by means of diversification)- i.e., major part of which can be eliminated by adding uncorrelated or conversely correlated components (i.e., securities) to an asset class or a portfolio. This risk element (specific market risk) only affects specific assets or components, usually specific, individual components. Characteristically, this risk represents the inherent factors that can inversely impact individual components or only a specific asset class.

The opposite of specific risk is a non-diversifiable risk or systematic risk, which constitutes the broader factors/ trends that have an impact on the entire financial system, and not only on a certain sector or asset class.

The diversifiable risk is also known as specific risk, non-systematic risk or idiosyncratic risk.