diversifiability (Meaning)
diversifiability (n.)
The quality or capacity of being diversifiable.
Synonyms & Antonyms of diversifiability
No Synonyms and anytonyms found
diversifiability Sentence Examples
- One of the key characteristics of a diversified portfolio is its diversifiability.
- Diversifiability refers to the ability of a portfolio to reduce risk through the inclusion of assets with non-perfectly correlated returns.
- By combining assets with different risk and return characteristics, an investor can reduce the overall risk of their portfolio while potentially maintaining a similar expected return.
- A diversified portfolio allows investors to spread their risk across different asset classes, industries, and geographic regions, reducing the impact of any single asset or sector on the overall portfolio performance.
- The degree of diversifiability of a portfolio depends on the correlation between the assets included in the portfolio.
- Assets with low or negative correlation tend to diversify each other better, providing greater risk reduction benefits.
- Diversifiability is a crucial aspect of modern portfolio theory, which emphasizes the importance of diversification as a risk management strategy.
- The concept of diversifiability is used by portfolio managers to construct portfolios that meet specific risk-return objectives.
- Diversifiability is particularly relevant in times of market volatility or economic uncertainty, as it can help to mitigate the impact of sudden market downturns.
- The level of diversifiability achievable in a portfolio is limited by the availability of uncorrelated or negatively correlated assets.
FAQs About the word diversifiability
The quality or capacity of being diversifiable.
No synonyms found.
No antonyms found.
One of the key characteristics of a diversified portfolio is its diversifiability.
Diversifiability refers to the ability of a portfolio to reduce risk through the inclusion of assets with non-perfectly correlated returns.
By combining assets with different risk and return characteristics, an investor can reduce the overall risk of their portfolio while potentially maintaining a similar expected return.
A diversified portfolio allows investors to spread their risk across different asset classes, industries, and geographic regions, reducing the impact of any single asset or sector on the overall portfolio performance.
