diversification
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The process of holding a range of investments in order to diversify risk, so that if one investment performs badly, this is compensated by better returns from the remainder of the portfolio. Dresdner Kleinwort Wasserstein financial glossary
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The process of investing across a range of investments in order to diversify (or minimise risk). As a result, if one investment performs poorly, better performance from the rest of the portfolio helps to reduce the risk of loss. London Stock Exchange Glossary
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Technique to mitigate portfolio risk by investing in different securities and thus reduce the risk of holding any single investment that could affect portfolio performance. NYSE Euronext Glossary
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diversify di‧ver‧si‧fy [daɪˈvɜːsfaɪ ǁ dˈvɜːr-, daɪ-] verb diversified PTandPP [intransitive]
1. COMMERCE if a company or economy diversifies, it increases the range of goods or services it produces:
diversify into
• Singapore has diversified into a wider range of industries.
diversify from
• The UK Department of Energy is urging farmers to diversify from traditional crops and consider using land to grow wood for fuel.
2. to start to put your money into different types of investments in addition to the investments you already have:
• Depositors in the eurocurrency markets sought to diversify into dollar bonds.
— diversification noun [countable, uncountable] :
• The company intends school software to be a major new area of diversification for their business.
• a policy of gradual economic diversification away from fishing
• Financial deregulation in Japan has led to increasing international diversification of investment portfolios.
• the record company's diversifications into sports clothing and perfumes
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Spreading investment risk by constructing a portfolio that contains many different investments whose returns are relatively uncorrelated. Risk levels can be reduced without a corresponding reduction in returns.
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diversify UK US /daɪˈvɜːsɪfaɪ/ verb [I or T]
► COMMERCE »
Farmers are increasingly diversifying into other activities to supplement their incomes.
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Using its powerful brand name, the company has successfully diversified and entered new markets.
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It would be a good idea to diversify the local economy away from its present over-dependence on oil.
► FINANCE »
He said he bought the shares in 2003 in order to diversify his portfolio.
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You could consider diversifying into a unit trust to spread the risk.
diversification /dɪˌvɜːsɪfɪˈkeɪʃən/ US /dɪˌvɝː-/ noun [U or C]
► COMMERCE,
FINANCE »
The launch of new products and diversification into new business areas continue to boost sales.
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Successful farm diversifications are launched by highly motivated people.
Financial and business terms.
2012.