Financial systematic and unsystematic risk

Question

in finance we're told that unsystematic risk can be eliminated through diversification on the other hand unsystematic can't be reduced in that manor, however what happens if we choose a portfolio with stocks that have diverse Beta, ie stocks with a beta of 2.0 others with 0.5 or even negative wouldnt that reduce total systematic risk.

Thank you

Answer 1

Unsystematic risk is diversifiable. Different that is what buying different assets with different betas gets you. Everything is laid out on the efficient frontier which sketches out the maximum expected return for any given level of undiversifiable risk.