DIVERSIFICATION

PRESENTED BY:
ANUSHREE GUPTA
 Eggs Concept
Diversification can be better explained by
the phrase:
“ Don’t put all your eggs in one basket”
 DIVERSIFICATION : WHAT IS IT?
Diversification in finance means reducing risk
by investing in more than one asset.
This could be better understood by risk averse
people.
This concept arose because of the fact that future
is uncertain.
Advantages
It helps to narrow down the choices of alternatives.
There is always a positive return.
It saves investors from loosing out their precious
money.
How to identify the portflio?
There are two ideas given by portfolio managers:

 Capital Asset Pricing Model

 Risk Parity
Corporate Diversification
 Horizontal Diversification

 Vertical Diversification
Diversification is mentioned in
Shakespeare
(Merchant of Venice):
My ventures are not in one bottom trusted,

Nor to one place; nor is my whole estate

Upon the fortune of this present year:
Therefore, my merchandise makes me not
sad.
 THANK YOU
HAVE A NICE DAY