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Unique Diversification Benefit |
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Unique Diversification BenefitReduction in the likelihood of financial distress for a conglomerate firm that comes with its diversified investments.Unique Diversification Benefit Similar MatchesInternational 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. Efficient diversificationEfficient 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. Sector diversificationSector diversificationConstituting of a portfolio of stocks of companies in each major industry group. Currency diversificationCurrency diversificationUsing more than one currency as an investing or financing strategy. Exposure to a diversified currency portfolio typically entails less exchange rate risk than if all the portfolio exposure were in a single foreign currency. 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. Further SuggestionsDiversificationdiversification Cone of diversification Liquidity diversification Naive diversification Indirect diversification benefits Markowitz diversification Diversification cone |
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