Which option best differentiates systematic risk from unsystematic risk, and what is the primary implication for portfolio management?

Systematic risk, driven by economy$-$wide factors, cannot be diversified away, while unsystematic risk is asset$-$specific and can be nearly eliminated through broad diversification.

Systematic risk affects only domestic markets, whereas unsystematic risk is mitigated solely through international investments.

Systematic risk is captured by beta and can be hedged with derivatives, while unsystematic risk is measured by standard deviation and remains constant regardless of diversification.

Systematic risk is inherent in cyclical industries, while unsystematic risk is best addressed by adjusting an asset's time horizon.