Index futures - which derives its value from underlying indices- trade a component of price risk, which is built into investment in equities.
Price risk involves price movement of securities, held by you, in an unfavourable direction. For instance, if you have bought a security for Rs 100, there is the risk of the price going down.
The price has two components: Specific risk is generated by specific events in the company and industry.
This risk is inseparable from investing in securities and can be reduced to a certain extent by taking well-informed investment decisions based on research.
Also, as the price risk of a portfolio is less than that of a single stock, diversification is the conventional way to reduce this risk - that is have stocks representing major industry sectors.
