Analyze portfolio diversification across asset classes. Get a score and identify concentration risk.
Enter allocation percentages (must sum to 100%).
| Asset Class | Allocation | Visual |
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Well-diversified portfolios typically include 5+ asset classes with no single allocation exceeding 40%.
Portfolio diversification is the most reliable way to reduce investment risk without sacrificing expected returns. The core principle is that assets which do not move in perfect correlation provide a smoothing effect when combined.
This tool uses the Herfindahl-Hirschman Index (HHI) to measure concentration. A portfolio with 100% in a single asset class receives the lowest possible score, while one spread across many classes scores highest.
Institutional investors and family offices typically allocate 20-40% to alternatives (private equity, real assets, infrastructure, commodities) for enhanced risk-adjusted returns. Consider your time horizon, liquidity needs, and risk tolerance when evaluating your allocation.
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