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Sector diversification |
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Sector diversificationConstituting of a portfolio of stocks of companies in each major industry group.Sector diversification Similar MatchesDiversificationDiversificationDividing investment funds among a variety of securities with different risk, reward, and correlation statistics so as to minimize unsystematic risk. Principle of diversificationPrinciple of diversificationThat portfolios of different sorts of assets differently correlated with one another will have negligible unsystematic risk. In other words, unsystematic risks disappear in diversified portfolios, and only systematic risks persist, those related to particular assets. Unique Diversification BenefitUnique Diversification BenefitReduction in the likelihood of financial distress for a conglomerate firm that comes with its diversified investments. International diversificationInternational diversificationThe attempt to reduce risk by investing in more than one nation. By diversifying across nations whose economic cycles are not perfectly correlated, investors can typically reduce the variability of their returns. Cone of diversificationCone of diversificationSee diversification cone. Further SuggestionsNaive diversificationEfficient diversification diversification Indirect diversification benefits Diversification cone Liquidity diversification Currency diversification Markowitz diversification |
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