Sentences with word «diversifiable»
The word "diversifiable" means the ability to reduce risks or uncertainties by investing in different assets or areas. It means spreading your investments or resources to minimize potential losses. Full definition
Evidence from Five Developed Markets,» by Alexeev and Tapon, November 2014) indicate that the ideal number of stocks needed to reduce the vast majority of diversifiable risk is upwards of 50, and perhaps even higher during times of market distress.
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The capital asset pricing model introduced the concepts of diversifiable and non-diversifiable risk.
Systematic risk is non diversifiable while Un-Systematic risk can be reduced through diversification.
Synonyms for diversifiable risk are idiosyncratic risk, unsystematic risk, and security - specific risk.
Unfortunately, the southeast coast of the US is a large part of the global property insurance market and not very diversifiable, because it would be a large percentage of the total premium for property coverages globally.
Stock portfolios have diversifiable risk and undiversifiable risk.
Since, this risk is non diversifiable, the investor have to bear the same, and wait for the untoward effects on the economy to wear out.
It is also known as «specific risk», «diversifiable risk» or «residual risk».
As a rule, once you've established a sufficiently diversified portfolio (if you haven't, the first step in risk management is to shut down your diversifiable risk), it's then optimal to vary your exposure to market risk more or less proportionally with the market's expected return / risk ratio.
Within the U.S., the researchers concluded that, to be confident of reducing 90 % of the diversifiable risk 90 % of the time, the number of stocks needed on average is about 55.
In our opinion, management's conservatism reduces most of the diversifiable risk the company faces.
The AAII study went on to state that, as a rule of thumb, diversifiable risk will be reduced by the following amounts:
Other financial models allow for multiple sources of non-diversifiable risk, but also insist that diversifiable risk should not carry any extra expected return.
This risk is diversifiable risk, meaning that is can be diversified away by adding more stocks.
Other names used to describe unsystematic risk are specific risk, diversifiable risk, idiosyncratic risk, and residual risk.
you diversify most of the diversifiable risk away from a portfolio by owning 20 or 25 positions.
Whereas, Unsystematic risk is diversifiable risk or Specific risk.
Always have a blend of stocks from different groups and sectors to diversify not only company - specific risk but also industry - specific or other group - specific, diversifiable risks.