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Efficient diversification |
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Efficient diversificationThe organizing principle of modern portfolio theory, which maintains that any risk-averse investor will search for the highest expected return for any particular level of portfolio risk.Efficient diversification Similar MatchesCone of diversificationCone of diversificationSee diversification cone. Liquidity diversificationLiquidity diversificationInvesting in a variety of maturities to reduce the price risk to which holding long bonds exposes the investor. Diversification coneDiversification coneFor given prices in the Heckscher-Ohlin Model, a set of factor endowment combinations that are consistent with producing the same set of goods and having the same factor prices. Such a set has the form of a cone. Unique Diversification BenefitUnique Diversification BenefitReduction in the likelihood of financial distress for a conglomerate firm that comes with its diversified investments. Naive diversificationNaive diversificationA strategy whereby an investor simply invests in a number of different assets in the hope that the variance of the expected return on the portfolio is lowered. In contrast, mathematical programming can be used to select the best possible investment weights. Related: Markowitz diversification. Further SuggestionsIndirect diversification benefitsInternational diversification diversification Diversification Currency diversification Principle of diversification Sector diversification Markowitz diversification |
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