What type of risk does 'comparative industry risk' refer to?

Comparative industry risk refers to the unique financial performance risks that are associated with a specific industry compared to others. It focuses on how the underlying factors affecting financial outcomes can differ between industries, influencing their performance metrics such as profitability, liquidity, and solvency.

When evaluating a company within its industry, comparative industry risk allows investors and analysts to assess how external factors and industry-specific dynamics can impact that company's performance relative to its industry peers. This includes understanding the competitive landscape, regulatory environment, and specific market trends that may influence financial success or failure.

By emphasizing industry-specific risks, this concept helps stakeholders make more informed decisions about investments based on the particular characteristics and vulnerabilities of the industry in question. Thus, comparative industry risk is primarily concerned with the financial performance risks inherent to the industry rather than broader market or economic risks that might affect all industries alike.