Export Options:
Risk
Portfolio Diversification
Spreading risk across assets/factors to reduce idiosyncratic volatility
Definition
Diversification spreads investments across uncorrelated assets to reduce unsystematic risk. Modern Portfolio Theory shows proper diversification can optimize the risk-return tradeoff without sacrificing expected returns.
Related Topics
#risk management
#asset allocation
#correlation
#systematic risk
Quick Actions
Related Terms
Category: Risk
Risk management involves identifying, assessing, and controlling potential losses in investment portfolios.
View all Risk terms →