diversification


diversification
Dividing investment funds among a variety of securities with different risk, reward, and correlation statistics so as to minimize unsystematic risk. Bloomberg Financial Dictionary
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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 [daɪˈvɜːsfaɪ ǁ dˈvɜːr-, 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.
   ► See also Portfolio.

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diversify UK US /daɪˈvɜːsɪfaɪ/ verb [I or T]
COMMERCE to start to produce a range of different types of products or services, in order to succeed in more markets or protect yourself against risk: »

Farmers are increasingly diversifying into other activities to supplement their incomes.

»

Using its powerful brand name, the company has successfully diversified and entered new markets.

»

It would be a good idea to diversify the local economy away from its present over-dependence on oil.

FINANCE to put money into a range of different types of investments in order to reduce risk: »

He said he bought the shares in 2003 in order to diversify his portfolio.

»

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.

»

Successful farm diversifications are launched by highly motivated people.


Financial and business terms. 2012.

Look at other dictionaries:

  • diversification — [ divɛrsifikasjɔ̃ ] n. f. • fin XIIIe; de diversifier ♦ Action de diversifier, de se diversifier; son résultat. La diversification du savoir. (v. 1966) Comm. Le fait, pour une entreprise, de varier ou d élargir la gamme de ses produits ou de ses… …   Encyclopédie Universelle

  • Diversification — may refer to: Diversification (finance) involves spreading investments Diversification (marketing strategy) is a corporate strategy to increase market penetration Agricultural diversification involves the re allocation of some of a farm s… …   Wikipedia

  • diversification — I noun alteration, assortment, change, contrast, deviation, difference, differentiation, heterogeneity, multifariousness, multiformity, separation, shift, variation associated concepts: diversification of investments II index innovation Burton s… …   Law dictionary

  • Diversification — Di*ver si*fi*ca tion, n. [See {Diversify}.] 1. The act of making various, or of changing form or quality. Boyle. [1913 Webster] 2. State of diversity or variation; variegation; modification; change; alternation. [1913 Webster] Infinite… …   The Collaborative International Dictionary of English

  • diversification — c.1600, noun of action from M.L. diversificare (see DIVERSIFY (Cf. diversify)). Economic sense is from 1939 …   Etymology dictionary

  • Diversification — La diversification est le fait pour une entreprise d investir dans de nouvelles activités. Sommaire 1 En gestion d entreprise 1.1 Diversification externe / interne 1.2 Tests de diversification (options réelles) …   Wikipédia en Français

  • Diversification — Dividing investment funds among a variety of securities with different risk, reward, and correlation statistics so as to minimize unsystematic risk. The New York Times Financial Glossary * * * diversify di‧ver‧si‧fy [daɪˈvɜːsfaɪ ǁ dˈvɜːr , daɪ… …   Financial and business terms

  • Diversification — A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk… …   Investment dictionary

  • diversification — noun 1. the act of introducing variety (especially in investments or in the variety of goods and services offered) (Freq. 1) my broker recommended a greater diversification of my investments he limited his losses by diversification of his product …   Useful english dictionary

  • diversification — (di vèr si fi ka sion) s. f. Action de diversifier. HISTORIQUE    XIVe s. •   Selon la diversification de la reflexion de lumiere causée de l aer ou d aucunes vapeurs, ORESME Thèse de MEUNIER.. ÉTYMOLOGIE    Voy. diversifier. SUPPLÉMENT AU… …   Dictionnaire de la Langue Française d'Émile Littré


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