Diversification - Revision history

Doug: Add link.

2024-02-06T03:57:38Z

Add link.

← Older revision		Revision as of 03:57, 6 February 2024
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	== See also ==		== See also ==
			* [[Alternative Credit Council]] (ACC)
	* [[Asset allocation]]		* [[Asset allocation]]
	* [[Cash in the new post-crisis world]]		* [[Cash in the new post-crisis world]]

imported>Doug Williamson: Expand definitions.

2023-03-25T13:14:54Z

Expand definitions.

← Older revision		Revision as of 13:14, 25 March 2023
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	''Risk management.''		1. ''Risk management - investment.''

	~~Diversification~~ is the process of spreading risk, to limit the possibility that an adverse event affecting a small number of investments could have an unacceptably detrimental effect on the overall portfolio.		In investment, diversification is the process of spreading investment risk, to limit the possibility that an adverse event affecting a small number of investments could have an unacceptably detrimental effect on the overall portfolio.

	Often summarised as 'Don't put all your eggs in the same basket'.		Often summarised as 'Don't put all your eggs in the same basket'.
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	However, some residual risks cannot be eliminated by diversification.		However, some residual risks cannot be eliminated by diversification.


			2. ''Risk management - funding - liquidity - operational risk.''

			More broadly, diversification can reduce risks in many other areas.

			For example, having a well diversified group of funders makes it less likely they will all withdraw funding at the same time.

			Similarly, having alternative - or multiple - operational service providers is another potentially beneficial example of diversification.


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	* [[Asset allocation]]		* [[Asset allocation]]
	* [[Cash in the new post-crisis world]]		* [[Cash in the new post-crisis world]]
			* [[Concentration risk]]
	* [[Correlation]]		* [[Correlation]]
	* [[Credit risk diversification]]		* [[Credit risk diversification]]
	* [[Diversifiable risk]]		* [[Diversifiable risk]]
	* [[Diversity]]		* [[Diversity]]
			* [[Funding]]
	* [[Hedging]]		* [[Hedging]]
			* [[Liquidity]]
	* [[Market risk]]		* [[Market risk]]
	* [[Matching]]		* [[Matching]]
	* [[Non-diversifiable risk]]		* [[Non-diversifiable risk]]
	* [[Portfolio]]		* [[Portfolio]]
			* [[Run]]
	* [[Specific risk]]		* [[Specific risk]]

	[[Category:Risk_frameworks]]		[[Category:Risk_frameworks]]

imported>Doug Williamson: Reference hedging.

2021-10-10T00:07:14Z

Reference hedging.

← Older revision		Revision as of 00:07, 10 October 2021
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	Diversification is a form of risk reduction.		Diversification is a form of risk reduction and hedging.

	However, some residual risks cannot be eliminated by diversification.		However, some residual risks cannot be eliminated by diversification.

imported>Doug Williamson: Add link.

2021-10-09T23:47:09Z

Add link.

← Older revision		Revision as of 23:47, 9 October 2021
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	* [[Diversifiable risk]]		* [[Diversifiable risk]]
	* [[Diversity]]		* [[Diversity]]
			* [[Hedging]]
	* [[Market risk]]		* [[Market risk]]
	* [[Matching]]		* [[Matching]]

imported>Doug Williamson: Mend link.

2021-04-03T13:30:11Z

Mend link.

← Older revision		Revision as of 13:30, 3 April 2021
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	* [[Market risk]]		* [[Market risk]]
	* [[Matching]]		* [[Matching]]
			* [[Non-diversifiable risk]]
	* [[Portfolio]]		* [[Portfolio]]
	* [[Specific risk]]		* [[Specific risk]]
	* [[Undiversifiable risk]]

	[[Category:Risk_frameworks]]		[[Category:Risk_frameworks]]

imported>Doug Williamson: Add link.

2021-04-03T13:28:29Z

Add link.

← Older revision		Revision as of 13:28, 3 April 2021
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	* [[Portfolio]]		* [[Portfolio]]
	* [[Specific risk]]		* [[Specific risk]]
			* [[Undiversifiable risk]]

	[[Category:Risk_frameworks]]		[[Category:Risk_frameworks]]

imported>Doug Williamson: Update.

2020-05-20T22:39:36Z

Update.

← Older revision		Revision as of 22:39, 20 May 2020
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	''Risk management.''		''Risk management.''

	Diversification is the process of spreading risk to limit the possibility that ~~a single~~ adverse event could have ~~a catastrophic~~ effect.		Diversification is the process of spreading risk, to limit the possibility that an adverse event affecting a small number of investments could have an unacceptably detrimental effect on the overall portfolio.

	Often ~~referred to~~ as 'Don't put all your eggs in the same basket'.		Often summarised as 'Don't put all your eggs in the same basket'.

	In corporate finance, the term is often used to mean the process of ensuring that an investment portfolio is constructed such that all possible specific risk (diversifiable risk) is eliminated.		In corporate finance, the term is often used to mean the process of ensuring that an investment portfolio is constructed such that all possible specific risk (diversifiable risk) is eliminated.

imported>Doug Williamson: Add link.

2020-05-20T16:34:14Z

Add link.

← Older revision		Revision as of 16:34, 20 May 2020
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	== See also ==		== See also ==
			* [[Asset allocation]]
	* [[Cash in the new post-crisis world]]		* [[Cash in the new post-crisis world]]
	* [[Correlation]]		* [[Correlation]]

imported>Doug Williamson: Add link.

2020-02-12T10:46:06Z

Add link.

← Older revision		Revision as of 10:46, 12 February 2020
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	Often referred to as 'Don't put all your eggs in the same basket'.		Often referred to as 'Don't put all your eggs in the same basket'.

	In corporate finance the term is often used to mean the process of ensuring that an investment portfolio is constructed such that all possible specific risk (diversifiable risk) is eliminated.		In corporate finance, the term is often used to mean the process of ensuring that an investment portfolio is constructed such that all possible specific risk (diversifiable risk) is eliminated.


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	== See also ==		== See also ==
	* [[Cash in the new post-crisis world]]		* [[Cash in the new post-crisis world]]
			* [[Correlation]]
	* [[Credit risk diversification]]		* [[Credit risk diversification]]
	* [[Diversifiable risk]]		* [[Diversifiable risk]]

imported>Doug Williamson: Expand definition.

2019-08-04T14:27:42Z

Expand definition.

← Older revision		Revision as of 14:27, 4 August 2019
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	''Risk management.''		''Risk management.''

	~~The~~ process of spreading risk ~~such~~ that no single event ~~can~~ have a catastrophic effect.		Diversification is the process of spreading risk to limit the possibility that a single adverse event could have a catastrophic effect.

	Often referred to as 'Don't put all your eggs in the same basket'.		Often referred to as 'Don't put all your eggs in the same basket'.
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	Diversification is a form of risk reduction.		Diversification is a form of risk reduction.

			However, some residual risks cannot be eliminated by diversification.


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	* [[Diversifiable risk]]		* [[Diversifiable risk]]
	* [[Diversity]]		* [[Diversity]]
			* [[Market risk]]
	* [[Matching]]		* [[Matching]]
	* [[Portfolio]]		* [[Portfolio]]