Is Beta measure of systematic risk

Does beta means systematic risk. I read that beta is change of stock with respect to market. Unsystematic risk is risk associated with stock. How come Beta is systematic risk?

Unsystematic risk can be divisified away. Systematic can not. In theory the market portfolio represents the most maximally diversified any portfolio in the world could be. Any risk that remains in the market portfolio would have to be systematic risk because we have diversified as much as possible. Beta is a item used with CAPM which states that the market factor is the only source of systematic risk.

chinni234 Wrote: ------------------------------------------------------- > Does beta means systematic risk. I read that beta > is change of stock with respect to market. > Unsystematic risk is risk associated with stock. > How come Beta is systematic risk? A stock’s price correlates with many things: price of the market, interest rates, sales, expenses, month of year, length of women’s skirts, which league won the world series. In general, many systematic and unsystematic risks correlate with the price of a stock. You seem to assume that only one can.