principle of diversification
- 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 ( diversification) portfolios, and only systematic risks persist, those related to particular assets. Bloomberg Financial Dictionary
Financial and business terms.
2012.
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Efficient diversification — The organizing principle of modern portfolio theory, which maintains that any risk averse investor will search for the highest expected return for any level of portfolio risk. The New York Times Financial Glossary … Financial and business terms
efficient diversification — The organizing principle of portfolio theory, which maintains that any risk averse investor will search for the highest expected return for any particular level of portfolio risk. Bloomberg Financial Dictionary … Financial and business terms
systematic risk principle — Only the systematic portion of risk matters in large, well diversified ( diversification) portfolios. Thus, expected returns must be related only to systematic risks . Bloomberg Financial Dictionary … Financial and business terms
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