Sentences with phrase «eliminated by diversification»

Trading risk is divided into two general categories: (1) Systemic risk affects all securities in the same class and is linked to the overall capital - market system and therefore can not be eliminated by diversification.

The important concept of unsystematic risk is that it is not correlated to market risk and can be nearly eliminated by diversification.

Systemic Risk Market risk due to price fluctuations which can not be eliminated by diversification.

Not exact matches

So although the resulting die - offs may not have triggered the original diversification of birds, by eliminating many ecological competitors, the extinction provided opportunities for survivors to diversify and spread, Cracraft says.

We believe this not only increases diversification but also may improve the consistency of returns over time by eliminating reliance on the results of a single manager.

There's also an academic Modern Portfolio Theory explanation for why you should diversify among risky assets (aka stocks), something like: for a given desired risk / return ratio, it's better to leverage up a diverse portfolio than to use a non-diverse portfolio, because risk that can be eliminated through diversification is not compensated by increased returns.

Portfolio diversification reduces investment risk by eliminating such possibilities through investing in assets of different expected returns.