Systematic vs. Nonsystematic Risk
Systematic risks (market, interest-rate, inflation) affect the whole market and CANNOT be diversified away; nonsystematic risks (business, credit, regulatory) are issuer- or industry-specific and CAN be reduced through diversification.
This split organizes every risk question on the SIE. A diversified index fund still carries full systematic risk, while a single biotech stock layers heavy nonsystematic risk on top.