Talk:Diversification (finance)

message: Is there any relation to normality or the central limit theorem? --165.230.129.157 18:52, 20 November 2006 (UTC)
thread_title:  Standard deviation table 

message: I agree the articles should be merged. --SueHay 17:51, 30 March 2007 (UTC)
thread_title: Merge

message: I took the liberty of merging the two articles together. Financial diversification now redirects to this article. I'm not an expert in finance, but I think I did a reasonable job on the merging.
Things that still need to be looked at:
1) the intro seems too long.  Perhaps the strategies bit needs its own section.
2) in the previous article, there was a segment on super-diversification.  This seemed like a personal plug more than an actual contribution to me, so I removed it.  As defined previously, super-diversification is not different from horizontal or vertical diversification; it's simply more of the same.  Additionally, the definition provided was crap, and not enough to let me understand anything about it except that it takes a lot of money.
3) more explanation on that final table would be nice.  I understand what's going on, but don't have access to the textbook to add the explanatory information that table desperately needs.
218.225.111.205 (talk) 01:13, 18 March 2008 (UTC)
thread_title:  Merge completed 

message: This chart is meaningless without some explanation.  Do all the stocks have the same standard deviation? Are they assumed to be uncorrelated? In the second column heading, what is meant by "average standard deviation"?--what standard deviations are being averaged?-- or should it just say "standard deviation"? Duoduoduo (talk) 21:57, 15 May 2010 (UTC)
replies: text: I've gone back to the original source to find the assumptions that lie behind the chart, and I've put the explanation in the article. Duoduoduo (talk) 18:09, 27 May 2010 (UTC)
thread_title: Re: "A chart comparing diversification to risk protection"

message: "Diversification can be segmented into systemic and non-systemic diversification." Without a definition of the terms systemic and non-systemic diversification, it's pointless to have them in here.  I've never heard of these terms, and I wonder if there is confusion with the concepts of systematic (non-diversifiable) and non-systematic (diversifiable) risk.  Please clarify!
"Relative diversification measurements compare the relationship of one asset to that of another asset."  Again, this needs to be explained. Specifically how does this work? (And I suggest the better wording "Relative diversification measures the relation of one asset to another.")
"For holistic analysis and measurement one can see the IPC below."  What does "the IPC" refer to-- is it the intra-portfolio correlation?  If so, "IPC" should be replaced by "the intra-portfolio correlation (IPC)".
"Total diversification of a portfolio of assets can be measured by the portfolio dimensionality. Portfolio dimensionality accounts for both the systemic and non-systemic influences to the portfolio."  This passage fails to define portfolio dimensionality, and it fails to explain how it accounts for those things.
"The more dimensions to the portfolio the more the portfolio is capable of performing in a simultaneous and independent manner."  As far as I can discern, a portfolio "performing in a simultaneous and independent manner" has no meaning whatsoever: simultaneous with what? independent of what?
"The number of dimensions is also equal to the quantity of factors in the portfolio."  What is meant by "factors" -- does it mean assets?-- or, does it mean underlying factors that drive the returns on the assets?
"The dimensionality measurement is currently patent pending. The inventors are Damschroder and Ladd and the patent is assigned to Gravity Investments."  This appears to be nothing but an advertisement for somebody's patent application.  Without any explanation of what is going on, and without any citations to the literature, this plug should not be here.
Can the author of this section clean it up along the lines suggested?Duoduoduo (talk) 22:35, 15 May 2010 (UTC)
replies: text: Since this section was a complete mess as per the above, I've deleted it. Duoduoduo (talk) 18:09, 27 May 2010 (UTC)
thread_title: Re: section "Types of diversification"

message: "It is important to remember that diversification only works because investment in each individual asset is reduced. If someone starts with $10,000 in one stock and then puts $10,000 in another stock, they would have more risk, not less. Diversification would require the sale of $5,000 of the first stock to be put into the second. There would then be less risk."
This paragraph is incorrect: Both examples have the same risk because the portfolio is the same (50% in each stock), just that the first has twice as much capital. I notice Fama is referenced at the end of the paragraph, and I'm curious what he actually says regarding this. 14.201.69.118 (talk) 16:33, 10 March 2012 (UTC)
thread_title:  "$10,000 in one stock..." 

message: Dr. Pozzolo has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
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We believe Dr. Pozzolo has expertise on the topic of this article, since he has published relevant scholarly research:
*Reference : Mohamed Azzim Gulamhussen & Carlos Pinheiro & Alberto Franco Pozzolo, 2010. "Do multinational banks create or destroy economic value?," Mo.Fi.R. Working Papers 36, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
ExpertIdeasBot (talk) 20:21, 24 September 2016 (UTC)
thread_title:  Dr. Pozzolo's comment on this article 

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thread_title:  External links modified 

message: A common path towards diversification is to reduce risk or volatility by investing in a variety of assets. Isn't this in fact the definition of diversification, not a type of diversification or "path towards" it?
Jokojis (talk) 00:31, 22 February 2024 (UTC)
thread_title:  tautology in lead