What does diversification mean?
Definitions for diversification
dɪˌvɜr sə fɪˈkeɪ ʃən, daɪ-di·ver·si·fi·ca·tion
This dictionary definitions page includes all the possible meanings, example usage and translations of the word diversification.
the act of introducing variety (especially in investments or in the variety of goods and services offered)
"my broker recommended a greater diversification of my investments"; "he limited his losses by diversification of his product line"
the condition of being varied
"that restaurant's menu lacks diversification; every day it is the same"
The act, or the result, of diversifying
A corporate strategy in which a company acquires or establishes a business other than that of its current product
Etymology: From diversificatio, from diversificatus, past participle of diversifico, from diversus + facio
Samuel Johnson's Dictionary
Etymology: from diversify.
If you consider how variously several things may be compounded, you will not wonder that such fruitful principles, or manners of diversification, should generate differing colours. Robert Boyle, on Colours.
This which is here called a change of will, is not a change of his will, but a change in the object, which seems to make a diversification of the will, but indeed is the same will diversified. Matthew Hale, Origin of Mankind.
the act of making various, or of changing form or quality
state of diversity or variation; variegation; modification; change; alternation
Etymology: [See Diversify.]
In finance, diversification means reducing risk by investing in a variety of assets. If the asset values do not move up and down in perfect synchrony, a diversified portfolio will have less risk than the weighted average risk of its constituent assets, and often less risk than the least risky of its constituent. Therefore, any risk-averse investor will diversify to at least some extent, with more risk-averse investors diversifying more completely than less risk-averse investors. Diversification is one of two general techniques for reducing investment risk. The other is hedging. Diversification relies on the lack of a tight positive relationship among the assets' returns, and works even when correlations are near zero or somewhat positive. Hedging relies on negative correlation among assets, or shorting assets with positive correlation.
The numerical value of diversification in Chaldean Numerology is: 7
The numerical value of diversification in Pythagorean Numerology is: 1
Examples of diversification in a Sentence
Any time China faces a slowdown or faces overall market volatility, it is going to be the biggest driver of volatility in the EM portfolios, because it's so big, you don't get a diversification benefit.
Commodities have shown a high correlation to inflation, especially in high inflation periods. In addition to diversification, the commodities asset class may also protect investment portfolios against an expected inflation or a declining local currency.
I don't see [ the EU's strategy ] as a decoupling strategy. I think the EU strategy, for the moment, is a diversification strategy... the lesson [ from Russia ] is that you can not have a single provider.
We’re always looking for new products, and our autumn seasonal salad is going to have roasted Brussels sprouts on it, five years ago, if someone told me a cutting-edge salad place would be serving Brussels sprouts, I wouldn’t have believed them. We’ve seen a real diversification of the American palate lately—they serve sushi in some high-school cafeterias now.
For investors, there are few challenges other than to remember the importance of diversification. Investors should only place a small percentage of their overall wealth in these high risk, high return opportunities, second, within this sector they should diversify among as many different companies as possible.
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"diversification." Definitions.net. STANDS4 LLC, 2023. Web. 29 May 2023. <https://www.definitions.net/definition/diversification>.
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