While most investments are vulnerable to certain levels of risk, stocks seem to be quite vulnerable to quite a lot of them. That is one reason why stocks are usually known as volatile investments. Certain market situations and conditions can either bring prices of individual stocks to go up or go down in just a short span of time. Here are some of the common risks that most stocks have to deal with.

Rating Risk

A rating risk can affect how a certain stock performs in the stock market. Companies and their stock are usually being provided a rating by analysts that seem to be a measure of their stock and company performance. Ana analysts rating can have a psychological effect on stocks even though they may not directly affect it. That is why companies and stocks try to at least maintain or exceed these ratings for a more favorable standing in the stock market. Failure to do so can sometimes cause the stock price to go down.

Headline Risk

Stocks are also vulnerable to headline risk. This is a type of risk related to media and how news headlines and stories can affect a company and its underlying stock. The headline may either be news that affects a company directly or even indirectly. A bad news can have a backlash on a certain stock or a certain groups of stocks in the market. This is one risk that all stocks seem to be vulnerable to.

Commodity Price Risk

This risk is one that may affect the company directly via the commodity prices that affect the business itself. The swing in commodity prices that a company requires for manufacturing its products may also have an effect in stock prices.