Diversification

Business / Accounting / Diversification: The process of spreading assets among different investments to reduce the risk of a decline in value of an investor’s total portfolio from a decline in any one investment.

Naive Diversification

Business / Finance / Naive Diversification: A 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 ca MORE

Markowitz Diversification

Business / Finance / Markowitz Diversification: A strategy that seeks to combine in a portfolio assets with returns that are less than perfectly positively correlated, in an effort to lower portfolio risk (variance) without sacrificing return. Rela MORE

Magic Of Diversification

Business / Finance / Magic Of Diversification: The effective reduction of risk (variance) of a portfolio, achieved without reduction to expected returns through the combination of assets with low or negative correlations (covariances). Related: Ma MORE

Agricultural Diversification

Business / Agriculture / Agricultural Diversification: A system of farming that encourages production of a variety of plants and animals and their products as opposed to monoculture or large-scale specialization. Advocates of diversification argue that it MORE

Liquidity Diversification

Business / Finance / Liquidity Diversification: Investing in a variety of maturities to reduce the price risk to which holding long bonds exposes the investor. MORE

Principle Of Diversification

Business / Finance / Principle Of Diversification: That 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 MORE

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