标题: portfolio problem --add more stock [打印本页] 作者: SeanWest 时间: 2013-4-13 23:58 标题: portfolio problem --add more stock
I have two situation, the first is I have twenty shares, but they are highly correlated,
the second is I have twenty other shars, but are low correlated with each other, compared with the first situation should i add more stocks to diversify? or should I add less stocks?作者: former 时间: 2013-4-13 23:58
how you derive this formula?作者: kmf229 时间: 2013-4-13 23:58
I always thought the important thing was to know how your prospective stock was correlated with all the stocks in the portfolio rather than the portfolio stocks correlation with each other…作者: Iginla2011 时间: 2013-4-13 23:59
Haha yeah I think so.
linping, to answer your original question, provided that the risk profiles of the two stocks are fairly similar you would most likely always add the security with low correlation to the existing portfolio.
Add more.作者: thommo77 时间: 2013-4-13 23:59
^ now I think you got this reversed. Pls clarify, what is the relationship between correlation and n? I think you need a lower correlation for diversification to be effective, and a higher n is the solution.作者: hardwork24 时间: 2013-4-13 23:59
why N(number of stocks) increases with low correlation?
