That is what this part of the project is going to determine. Risk can be divided up into two categories, systematic risk, and unsystematic risk. Systematic risk is the risk the whole market undergoes. This risk cannot be adjusted or reduced. Things that cause systematic risk to happen are the Fed s actions in the economy, or other economic factors that affect all companies.
Unsystematic risk is specific risk to each individual company.
The opposite is also true and Apple Computers can fall with bad earnings. There is a way of getting rid of unsystematic risk. This is called diversification. By purchasing stocks that do not have much in relation with each other, then this type of risk will vanish. This will happen after ones portfolio reaches around 20 securities.