Risk arising from disturbances which affect all projects in a class. This type of risk cannot be reduced by diversification. This is contrasted with non-systematic or idiosyncratic risk, where the disturbances affecting different projects are independent, so that the overall risk of a portfolio of assets can be reduced by dividing it between a number of projects. In the stock market, for example, risk is partly systematic: there are market-level factors that affect most share prices in the same direction. It is also partly idiosyncratic: every industry and every company is affected by different random disturbances.