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7 Examples of Price Risk

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Price risk is the potential for the decline in the price of an asset or security relative to the rest of the market. It excludes market risk, or the potential for an entire market to go down in value. As such, price risk is the component of investing risk that can be reduced with diversification. The following are common types of price risk.

Inherent Risk

The possibility that a firm has misstated its financial results, performance or position.

Business Model

A business model that isn't sustainable such as a small firm that is buying growth that it can't scale.

Business Risk

A business risk that may cause the current or future earnings of the firm to decline.

Financial Risk

Financial risks that face the firm such as liquidity risk.

Business Cycle

A turn in the business cycle of an industry. For example, oversupply that leads to declining margins that impacts an entire industry for an extended period of time.


Volatility in the price of the asset. For example, price swings in a small cap stock based on rumors or reactions to news.


Loss of investor and customer confidence in the management or culture of the firm based on behavior and performance.
Overview: Price Risk
The potential for the decline in the price of an asset or security relative to the rest of the market.
Related Concepts

Investing Risk

This is the complete list of articles we have written about investing risk.
Business Risks
Commodity Risk
Credit Risk
Exchange Rate Risk
Falling Knife
Inflation Risk
Inherent Risk
Investing Risk
Liquidity Risk
Model Risk
Political Risk
Priced For Perfection
Refinancing Risk
Reputational Risk
Risk Of Ruin
Short Squeeze
Unknown Risks
Unsystematic Risk
Upside Risk
Value Trap
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Investing Risk

A list of common investment risks.

Priced For Perfection

The definition of priced for perfection with an example.

Inherent Risk

A definition of inherent risk with an example.

Trade War

An overview of trade wars with examples.

Short Squeeze

The definition of short squeeze with examples.

Speculative Risk

The definition of speculative risk with examples.

Unsystematic Risk

The definition of unsystematic risk with examples.

Audit Risk

The definition of audit risk with examples.

Risk Opposite

The true opposites of risk.

Risk Management

An overview of the risk management process.

Risk Evaluation

The basic steps of risk evaluation.

Risk Response

The common types of risk response.

Risk Exposure

A definition of risk exposure with example calculations.

Risk Monitoring

The common elements of risk monitoring.

Acceptable Risk

A definition of acceptable risk with examples.

Minimax Criterion

The definition of minimax criterion with examples.

Risk Estimates

The common types of risk estimate.

Business Risk Management

An overview of common business risk management techniques.

Technology Risk Management

A reasonably comprehensive overview of technology risk management.
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