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. Related: Naive diversification.

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

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 Efficient Portfolio

Business / Finance / Markowitz Efficient Portfolio: Also called a mean-variance efficient portfolio, a portfolio that has the highest expected return at a given level of risk. MORE

Markowitz Efficient Set Of Portfolios

Business / Finance / Markowitz Efficient Set Of Portfolios: The collection of all efficient portfolios, which can be graphed as the Markowitz efficient frontier. MORE

Markowitz, Harry

Business / Finance / Markowitz, Harry: Nobel laureate in economics. Father of modern portfolio theory. 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