Concept · Stock-level risk (bottom-up)
Idiosyncratic
Synonym for residual in classical finance literature. We standardize on *residual*.
In depth
The classical-finance term for the residual: return not explained by any factor exposure. RiskModels standardizes on *residual* throughout, but you'll see 'idiosyncratic' in the literature — same quantity.
In the methodology
Explained risk: variance decomposition →Referenced by (2)
- Every Position Has a Level Too
How RiskModels picks the right hedge depth automatically, per stock, per day
- ERM3 Cascade-Residual Persistence and the Allocator Skill Signal
Top-decile rank persistence, active-share comparison, and tail-stratified inference across 1,000 top-AUM US mutual funds