"different" + facere“do”) - expanding the range of products and reorienting sales markets, developing new types of production in order to increase production efficiency, obtain economic benefits, and prevent bankruptcy. This diversification is called production diversification.

Values

The greatest effect of diversification is achieved by adding assets of various classes, industries, regions to the investment portfolio in such a way that the fall in the value of one asset is compensated by the growth of another. This the best way obtaining economic benefits from the investment. Along with this, it is also known naive diversification "(eng. naive diversification) - a strategy, using which, the investor simply invests in a number of different assets and hopes that the probability of receiving income from this portfolio thereby increases. The use of this strategy does not necessarily lead to a reduction in the risks associated with the portfolio and may even increase these risks. How the distribution of money capital The distribution of invested or loaned monetary capital among various investment objects in order to reduce the risk of possible losses of capital or income from it. This diversification is called credit diversification. In the field of banking operations, the principle of diversification is manifested in the distribution of loan capital among a large number of customers. Sometimes banking legislation prohibits commercial banks from providing a single company with a loan in excess of 10% of the bank's equity capital. The activity of investment companies and funds is based on the principle of diversification. Expanding the range, changing the type of products manufactured by an enterprise, firm, mastering new types of production in order to increase production efficiency, obtain economic benefits, and prevent bankruptcy. Types of diversification Risk diversification Diversification is divided into two types - related and unrelated. Associated diversification is a new area of ​​a company's activities that is related to existing areas of business (for example, in manufacturing, marketing, procurement, or technology). Unrelated (lateral) diversification is a new area of ​​activity that does not have obvious links with existing business areas.

The risk associated with owning an asset can be divided into two parts. The first component is market risk. It is also called systemic (systematic) or non-diversifiable, or non-specific. It is associated with generally significant factors that affect all assets, for example, the dynamics of the economic cycle, war, revolution. When the economy is booming, the vast majority of assets generate higher returns. If there is a decline, then the profitability of financial instruments also falls. This risk cannot be ruled out as it is a system-wide risk. The second part is non-market, specific or diversifiable risk. It is associated with the individual characteristics of a particular asset, and not with the state of the market as a whole. For example, the shareholder of a certain enterprise is exposed to the risk of losses due to a strike at this enterprise, the incompetence of its management, etc. This risk is diversifiable because it can be reduced to almost zero through portfolio diversification. As shown by studies by Western scientists who analyzed the dynamics of stock returns in the second half of the 60s and early 70s of the 20th century, a portfolio consisting of 20 assets was able to virtually completely eliminate non-market risk. In the case of international diversification, the number of shares could be limited to ten. Recent studies by J. Campbell, M. Lettau, B. Mulkail and I. Hu show that, compared with the 60s of the 20th century, in the 80s and 90s the correlation between stocks decreased and increased their volatility associated with non-market risk. This requires now a broader diversification of the portfolio in terms of stock composition to achieve the same level of risk reduction as in the 60s and 70s. The results of the research are clearly presented in Figs. 3.2 and 3.3. On fig. 3.2, the time is plotted along the horizontal axis, and the excess of the standard deviation of the portfolio return over the standard deviation of the index, which includes shares traded on the New York Stock Exchange, the American Stock Exchange and in the NASDAQ system, is plotted on the vertical axis. The top line on the chart (solid line) characterizes a portfolio of two randomly selected stocks, the top dashed line is a portfolio of 5 stocks, the middle dashed line is a portfolio of 20 stocks, and the bottom dashed line is a portfolio of 50 stocks. As you can see from the graph, the excess of the standard deviation of returns for a portfolio of 20 stocks in the 60s and 70s was less than 10%. From 1985 to 1997 it ranged from 15% to 20%. At the same time, the excess standard deviation return for a portfolio of 50 stocks from 1985 to 1997 was less than 10%. Thus, in order to get the same result from diversification for the period from 1985 to 1997 as provided by a portfolio of 20 stocks in the period from 1963 to 1985, it was necessary to combine not 20 but 50 stocks into a portfolio.

On fig. 3.3 shows the excess of the standard deviation of returns for portfolios consisting of different numbers of stocks. The number of stocks in the portfolio is plotted along the horizontal axis, and the excess of the standard deviation of the portfolio's return over the standard deviation of the index is plotted along the vertical axis. The solid line characterizes the period from 1963 to 1973, the lower dotted line characterizes the period from 1974 to 1985 and the upper dotted line characterizes the period from 1986 to 1997.

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A broadly diversified portfolio contains almost exclusively market risk. A poorly diversified portfolio has both market and non-market risks. Thus, an investor can only reduce his risk to the level of the market if he forms a widely diversified portfolio.

By purchasing an asset, the investor expects to be compensated for the risk he is taking. However, the risk has two parts. How will the market evaluate risk components in terms of expected returns?

As mentioned above, an investor is able to almost completely eliminate specific risk by building a widely diversified portfolio. The CAPM model assumes that the depositor is free to buy and sell assets at no additional cost. Therefore, the formation of a more diversified portfolio does not lead to an increase in its costs. Thus, at no cost, the investor can easily eliminate the specific risk. Therefore, in theory, it is assumed that non-market risk is not rewarded, since it can be easily eliminated through diversification. In this regard, if an investor does not properly diversify his portfolio, he takes unnecessary risk in terms of the benefits that he brings to society. At the same time, by acquiring, for example, a share, an investor finances production and thus benefits society. The purchase of shares is associated with non-market risk, which is unavoidable. Therefore, the investor must receive a reward adequate to this risk. Otherwise, he will not purchase this paper, and the economy will not receive the necessary financial resources. However, society (the market) will not reward him for a specific risk, since it is easily eliminated by portfolio diversification. From the point of view of financing the needs of the economy, this risk does not make sense. Thus, only systematic risk is rewarded. Therefore, the value of assets should be assessed relative to the magnitude of this particular risk. The entire risk of an asset (portfolio) is measured by indicators such as dispersion and standard deviation. To assess the market risk is another value, which is called beta.

Diversification is the distribution of an investment portfolio among different assets to reduce the risks associated with a fall in the value of an individual asset or the bankruptcy of an individual company.

Diversification is not an end in itself. With the help of diversification, the investor tries to reduce risk at the same return, and not reduce risk at the expense of return. Therefore, do not get carried away with diversification, attempts to constantly maintain a portfolio in a diversified state can lead to a situation where an investor sells a more promising asset and buys a less promising instrument due to the fact that a promising position occupies too much of the portfolio.

Diversification can reduce investment risk, but it cannot completely eliminate it. There are risks that are called non-diversifiable. They got their name from the fact that you cannot hide from them with the help of diversification. An example of such a risk is the global economic crisis, during the crisis all sectors of the economy fell into decay, issuers of fixed income instruments defaulted, and the cost of resources fell at an enormous rate.

The essence of diversification is the formation of an investment portfolio (selection of assets in the portfolio) in such a way that, under certain restrictions, it satisfies a given risk / return ratio.

The task of the investor at this stage is to form the most efficient portfolio, i.e. minimize portfolio risk for a given level of return, or maximize return for a selected level of risk.

decline investment risk the result of building a portfolio of different assets is known as the diversification effect.

A graphical illustration of the diversification effect, as well as its impact on various types of risk, is shown in fig. 4.

Figure 4 - The effect of diversification

The need to separate risk into non-systematic and systematic lies in the fact that these types of risk behave differently when the number of assets included in the portfolio increases, namely:

if asset returns are not completely positively correlated (< 1), то диверсификация портфеля уменьшает его дисперсию (риск) без уменьшения его средней доходности;

in the case of a well-diversified portfolio, non-systematic risk can be neglected, since it tends to zero;

diversification does not eliminate systematic risk.

The method of reducing serious losses in investment is the diversification of financial investments, i.e. acquisition of a certain number of various financial assets. There is a certain relationship between risk and portfolio diversification.

The total risk of a portfolio consists of two parts:

diversified risk (not systematic) that can be managed;

undiversified, systematic - unmanageable.

A portfolio consisting of shares of such diverse companies ensures the stability of obtaining a positive result.

A diversified portfolio is a combination of various valuable papers compiled and managed by the investor.

The use of a diversified portfolio approach to investment allows you to minimize the likelihood of not receiving income.

R P \u003d D 1 R 1 + D 2 R 2 + ... + D n R n , (1)

where - R P is the rate of return of the entire portfolio,

Р 1 , Р 2 , Р n - rates of return of individual assets,

D 1 , D 2 , D n are the shares of the respective assets in the portfolio.

Diversification of the portfolio of securities reduces the risk in the investment business, but does not completely eliminate it. The latter remains in the form of the so-called non-diversification risk, i.e. risk arising from the general state of the economy.

There is a portfolio theory: i.e. the theory of financial investments, within the framework of which the most favorable distribution of the risk of the portfolio and the assessment of its profitability are carried out.

A model of the relationship between systemic risk, income and profitability is developed.

The development of an investment strategy is always based on an analysis of the return on investment, the time of investment and the risks arising from this. These factors in interrelation determine the effectiveness of investments in a particular stock market instrument. The adopted investment strategy determines the tactics of investing funds: how much money and in what securities should be invested and, therefore, is always the basis of securities transactions.

The development of an investment strategy, first of all, pursues the goal of maximizing the income from investing funds based on minimizing the price of resources used for investment and the cost of the operation, and choosing an investment option that provides the highest, compared with possible, profitability. Naturally, the efficiency of investment differs depending on whether only own funds are used for investments or borrowed resources are also attracted.

One of the advantages of portfolio investment is the ability to choose a portfolio to solve specific investment problems. A portfolio type is its investment characteristic based on the ratio of return and risk. At the same time, an important feature in classifying a portfolio type is how and from what source this income was received: due to an increase in the market value or due to current payments - dividends, interest.

The portfolio type classification is given in Appendix B.

The growth portfolio is formed from the shares of companies whose market value is growing. The purpose of this type of portfolio is to increase the capital value of the portfolio along with the receipt of dividends. However, dividend payments are made in small size. The rate of growth in the market value of the aggregate of shares included in the portfolio determines the types of portfolios included in this group.

An aggressive growth portfolio aims to maximize capital growth. This type of portfolio includes stocks of young, fast-growing companies. Investments in this type of portfolio are quite risky, but at the same time they can bring the highest income.

The portfolio of conservative growth is the least risky among the portfolios of this group. Consists mainly of the shares of large, well-known companies, characterized by low, but steady growth rates of market value. The composition of the portfolio remains stable over a long period of time. Focused on capital preservation.

A medium growth portfolio is a combination of the investment properties of aggressive and conservative growth portfolios. This type of portfolio includes, along with reliable securities, risky stock instruments, the composition of which is periodically updated. This type of portfolio is the most common portfolio model and is very popular with high-risk investors.

income portfolio. This type of portfolio is focused on obtaining high current income - interest and dividend payments. The income portfolio is made up mainly of income shares, characterized by moderate growth in market value and high dividends, bonds and other securities, the investment property of which is high current payments. A feature of this type of portfolio is that the purpose of its creation is to obtain an appropriate level of income, the value of which would correspond to the minimum degree of risk acceptable to a conservative investor. Therefore, the objects of portfolio investment are highly reliable stock market instruments with a high ratio of consistently paid interest and market value.

The portfolio of regular income is formed from highly reliable securities and brings an average income with a minimum level of risk.

The portfolio of income securities consists of high-yield corporate bonds, securities that bring high income with an average level of risk.

Portfolio of growth and income. The formation of this type of portfolio is carried out in order to avoid possible losses in the stock market, both from a fall in the market value, and from low dividend or interest payments. One part of the financial assets included in this portfolio brings the owner an increase in capital value, and the other part - income. The loss of one part can be compensated by the increase of another.

Dual purpose portfolio. This portfolio includes securities that bring its owner a high income with an increase in invested capital. In this case, we are talking about securities of dual-purpose investment funds. They issue their own shares of two types, the first bring high income, the second - capital gains.

A balanced portfolio implies a balance of not only income, but also the risk that accompanies transactions with securities, and therefore, in a certain proportion, consists of securities with a rapidly growing market value and high-yield securities. As a rule, this portfolio includes ordinary and preferred shares, as well as bonds.

The choice of securities for portfolio investment depends on the objectives of the investor and his attitude to risk. For all investors, it is customary to distinguish three types of investment objectives and associated attitudes towards risk.

1. The investor seeks to protect his funds from inflation; to achieve the goal, he prefers investments with low returns, but with low risk. This type of investor is called conservative.

2. The investor is trying to make a long-term investment of capital that ensures its growth. To achieve this goal, he is ready to make risky investments, but in a limited amount, insuring himself by investing in low-yield, but also low-risk securities. This type of investor is called moderately aggressive.

3. The investor strives for the rapid growth of invested funds, is ready to make investments in risky securities for this, quickly change the structure of his portfolio, conducting a speculative game on securities rates. This type of investor is called aggressive.

If we consider the types of portfolios depending on the degree of risk that the investor accepts, then the results can be summarized in Table 5.

Table 5 - Relationship between investor type and portfolio type

Risk diversification- one of the basic concepts in the theory of portfolio investment, which can be briefly described by the old proverb "do not put all your eggs in one basket."

At the beginning of the article, I will plunge a little into history in order to show the importance of this concept for the entire financial market as a whole. how to avoid mistakes for beginners who consider diversification to be the solution to all problems when investing. We will also consider the issue related to the diversification of non-trading risks - a rather complicated and “slippery” issue, in my opinion.

Markowitz Portfolio Theory

First scientific rationale the feasibility of diversifying an investment portfolio in his article "Portfolio Selection" showed Harry Markowitz over 50 years ago. In his article, he first proposed a mathematical model for the formation of an optimal investment portfolio and proposed specific methods for constructing investment portfolios under certain conditions.

In fact Markowitz managed to explain in mathematical language the validity of the formation of investment portfolios - it is obvious that by the 50s of the 20th century, all those who were engaged in investing were also engaged in diversifying the risks of their investments, but they did this solely for intuitive reasons without relying on any specific calculations . And it is obvious that no one really could accurately assess the effect of such “artisanal” diversification methods.

For more than half a century of its existence, the work Markowitz has become the fundamental basis of all types of portfolio investment. Now Portfolio Theory Markowitz is included in all training programs that somehow include financial analysis.

For his work on the theory of portfolio investment Harry Markovets in 1990 he was awarded the Nobel Prize in the nomination "for his work on the theory of financial economics".

Of course, the first thing that came to my mind was to use the knowledge gained about diversification when building an investment portfolio from Alpari's PAMM accounts.

Unfortunately, instead of investing, I, like a real student, began to idealize the model and was more engaged in the “beautiful” solution of mathematical problems than thinking about the problems that arise when applying risk diversification methods in the formation of an investment portfolio.

And the problems during the diversification of PAMM accounts, in particular, and other financial assets, in general, arise as follows:

1. In the above example, both the average return and the level of risks (RMS) for the entire forecast investment period remain at the same level. In reality, usually over time, a financial asset can change both the average level of return (usually downward) and the level of risk of the asset (unfortunately, usually upward). And it is extremely difficult to predict the change in these indicators. The simplest way to assess the future risks and returns of an asset is an assessment based on historical data on the return of an asset, but if the history of an asset is very short, then the assessment of returns based on a “short” history should not inspire confidence among investors. Therefore, predicting risks and average returns assets are worth only for those assets that have a rather “long” own history of profitability, and also during this history showed approximately the same level of profitability and risk level.
2. As a result, it turns out that far from all assets we will be able to correctly assess the future average return and risk level, but this does not mean at all that assets for which we cannot make a forecast should not be included in your investment portfolio. In general, such assets can also be included in the portfolio, but this should be done very carefully. In the example considered above, the risk of all assets included in investment portfolio No. 2 was the same. But what if there is a question of adding an asset to the investment portfolio, the risks of which are higher than the risks of the assets included in the portfolio and the expected return is the same. It is obvious that the question of adding such an asset to the investment portfolio depends solely on how many times the risks of this asset are higher than the risks other assets included in the portfolio, as there is a certain threshold after which it is not advisable to add a new asset with increased risks, because this will generally increase rather than decrease the risk level of the portfolio as a whole.

   Based on my empirical observations, I came to the conclusion that it makes no sense to include assets in the investment portfolio, the risks for which are approximately more than 2 times higher than the risks of other assets included in the portfolio, if the return on this asset is at the level of the return on the investment portfolio itself. Since in this case the diversification effect will not be achieved - the level of portfolio risks will rise, not fall - and the average return will remain at the same level.

3. Another diversification problem that is commonly encountered when investing in PAMM accounts is that we determine the risk level of a PAMM account based on the account's yield curve, but some types of trading strategies that managers use deliberately flatten the yield curve due to short-term increase account risks. Usually, such a phenomenon is observed on accounts using martingale and averaging - according to the profitability schedule of such accounts, trading risks cannot be tracked at all, but if a drawdown suddenly occurs, then this drawdown can “kill” the entire account at once. Therefore, when you are diversifying your investment portfolio, it is advisable to exclude from your account calculations using martingale and averaging (more about these trading methods) - since the trading risks of such accounts, in principle, are extremely difficult to adequately assess.
4. It is also important that the profitability of PAMM accounts included in the investment portfolio should not be similar to each other, i.e. if the yield graphs of some assets are similar to each other like two drops of water, then only one of these accounts should be included in the portfolio - the one with the best return / risk ratio (although it can be selected on other grounds), since diversification in this case loses every meaning. This is due to the fact that adding to the portfolio an account with a return that is identical to the return of an account already included in the portfolio will not affect the performance of the investment portfolio for the better.

Diversification of non-trading risks when forming an investment portfolio

Diversification of non-trading risks is a very complex and sensitive issue. Let me remind you that not trading risks are risks associated with the likelihood of fraud and banal theft

investors' money, including as a result of the bankruptcy of your counterparties. The problem of non-trading risks is especially relevant when investing in high-risk projects such as HYIPs and Pseudo trust management. But also this problem does not lose its relevance in the case of investing in real trust management, including in PAMM systems, because no one is immune from bankruptcy - and even large financial institutions sometimes go bankrupt.

And one of the methods to reduce non-trading risks is also the method of diversification. But there are also a number of problems that an investor may encounter when diversifying non-trading risks.

1. The main problem in diversifying non-trading risks is the inability to even approximately estimate possible risks- in the case of forex brokers, the problem is that I don’t even remember bankruptcy precedents, but this does not mean that there will be none, but it is extremely difficult to assess the probability of bankruptcy of a company. there are much more scams (bankruptcies), but the problem of diversification lies in the fact that the risks of bankruptcy of these companies are not constant - they are constantly growing and, as a result, you need to constantly exit from some projects and invest in new ones, but it is extremely difficult to determine the moment to exit such a project. Now , looking back, I understand that the ideal moment to exit projects and it was the beginning of 2013 - the period of the emergence of products and - which offer a similar level of profitability, but at the same time only appeared on the Pseudo Trust Management market at that moment. But as the saying goes, "if you knew where you would fall ...".

   The usual diversification approach for diversifying non-trading risks is not suitable, as you have to blindly lay your eggs in possibly leaky baskets. As a result, when dealing with non-trading risks, I prefer to trust my funds to trusted financial counterparties, without experimenting with “incomprehensible” desks.

2. The second problem in diversifying non-trading risks may be related to the relatedness of various companies. Associated companies, I mean groups of companies, the bankruptcy of one of which will most likely entail the bankruptcy of other companies in this group. At the same time, such relations may not be bilateral, but one-sided. In particular, in the eyes of investors (or rather, in my eyes), the company Mill Trade is unilaterally associated with the company MMSIS- because it says a lot about the fact that Mill Trade running on the engine MMSIS. From the point of view of non-trading risks, it is highly likely that the scam (bankruptcy) of the company MMSIS- immediately lead to bankruptcy Mill Trade, but will bankruptcy happen MMSIS in case of bankruptcy Mill Trade- I'm not sure, in any case, the probability is less.

   As a result, it makes no sense to distribute your investments between these companies - if my point of view is correct, then it is safer to invest in MMSIS(if you have already decided to invest in one of these companies) than in Mill Trade or both companies.

   This was the first example where diversification of non-trading risks is unlikely to work due to the external appearance of companies being connected.

   I'll give you a second example. In the recent past, the futility of diversifying investments due to the presence of a stereotypical connection between two companies in the minds of investors was also clearly manifested - we are talking about the same Gamma And VladimireFH. In the eyes of investors, these companies were very similar in that they worked for the same amount of time, showed approximately the same profitability, had a similar legend that investors' funds are involved in trading on the forex market, etc...

   As a result, almost every investor in the company VladimirFH at the same time was an investor in the company Gamma. And the moment when Gamma announced its scam the fate of the company VladimirFH was a foregone conclusion, because a huge number of applications for withdrawal of funds were submitted to the company VladimirFH from those investors who lost in Gamma. Eventually VladimirFH as well as Gamma never paid anyone else.

In this article, I tried to emphasize to the reader the fact that diversification is an indispensable thing for an investor, because. helps to reduce the risks of an investment portfolio without reducing its profitability. But at the same time, the process of diversification must be approached carefully, because. Not every addition of a new asset to your investment portfolio can be called diversification, and even more so - the addition of some assets can lead to the opposite effect - an increase in the risks of the investment portfolio.

Therefore, every time before including a new asset in your investment portfolio, do not forget to ask yourself a few simple questions: “Do I need it?”, “How will this affect the risks of the portfolio?”, “Maybe I am mistaken in my conclusions and it is worth them recheck?"

Diversification

(Diversification)

Diversification is an investment approach aimed at reducing financial markets

The concept, main methods and goals of diversifying production, business and financial risks in the currency, stock and commodity markets

Production diversification Production diversification methods Production diversification goals Market diversification Investment diversification Currency diversification Sources and links

Diversification is the definition

Diversification is an investment approach aimed at minimizing the risks arising during production or trade associated with the distribution of financial or production resources across different industries and areas. Wide use diversification received in the currency and stock markets as a means of minimizing losses during trade.

Diversification- This expanding the range of products and reorienting markets marketing, the development of new types of production in order to increase production efficiency, obtain economic benefits, and prevent bankruptcy. This diversification is called production diversification.

Diversification is one way to reduce risk investment portfolio, which consists in the distribution of investments among the various assets included in it.

Diversification is distribution capital between different investment objects in order to reduce risk possible losses (as capital, and income from it).

Diversification is process expanding the scope of the enterprise or issuing money to them of a diverse range of products, as a rule, not corresponding to the established production profile.

Diversification is self-organizing process increasing diversity in a given local area of ​​the larger whole; expansion of structural features and properties or functional purpose (consumer qualities) of the produced goods or means of influencing it in the course of its creation; enrichment of the content and nature of labor through the growth of its internal diversity, increasing diversity in the field of culture and art, in recreation (leisure) areas, etc .; expansion (extensive and intensive) of profiles of industrial enterprises and associations of enterprises; spin-off of subsidiaries from the parent company or enterprises, business associations or a concern with an increase in the range, volume and types of services. The science of changing and stabilizing diversity is diatropics (Yu. V. Tchaikovsky).

Diversification is marketing decision, a strategy that means the company enters a new for him market, inclusion in the production program of products that do not have a direct connection with the former field of activity of the enterprise.

Diversification is distribution of an investment fund among securities with different risks, returns and correlations, in order to minimize non-systematic risk.

General characteristics of diversification

The financial activity of an enterprise in all its forms is associated with numerous risks, the degree of influence of which on the results of this activity increases significantly with the transition to a market economy.

Diversification is

The risks accompanying this activity are allocated to a special group of financial risks that play the most significant role in the overall "risk portfolio" of the enterprise. The increase in the degree of influence of financial risks on the financial performance of an enterprise is associated with the rapid volatility of the economic situation in the country and the financial market conditions, the expansion of the scope of financial relations, the emergence of new financial technologies and tools for our business practice, and a number of other factors.

In the system of methods for managing the financial risks of an enterprise, the main role belongs to external and internal mechanisms for neutralizing risks.

Internal mechanisms for neutralizing financial risks are a system of methods for minimizing their negative consequences, chosen and implemented within the enterprise itself.

The main object of using internal neutralization mechanisms are, as a rule, all types of acceptable financial risks, a significant part of the risks of the critical group, as well as uninsurable catastrophic risks, if they are accepted by the enterprise due to objective necessity. In modern conditions, the internal mechanisms of neutralization cover the predominant part of the financial risks of the enterprise.

The advantage of using internal mechanisms for minimizing financial risks is a high degree of alternativeness of managerial decisions, which, as a rule, do not depend on other business entities. They proceed from the specific conditions for the implementation of the financial activities of the enterprise and its financial capabilities, allow to take into account the influence of internal factors on the level of financial risks to the greatest extent in the process of minimizing their negative consequences.

Diversification is

The system of internal and external mechanisms for minimizing financial risks provides for the use of the following main methods.

Risk avoidance. This direction of neutralizing financial risks is the most radical. It consists in the development of such measures of an internal nature that completely exclude a specific type of financial risk. The main of these measures include:

Refusal to carry out financial transactions, the level of risk for which is extremely high. Despite the high efficiency of this measure, its use is limited, since most financial transactions are associated with the implementation of the main production and commercial activities of the enterprise, ensuring a regular income income and shaping it profit;

Refusal to use high amounts of borrowed capital. decline the share of borrowed funds in the economic turnover allows you to avoid one of the most significant financial risks - the loss of financial stability of the enterprise. However, this risk avoidance entails decline effect of financial leverage, i.e. the possibility of obtaining an additional amount of profit on the invested;

Refusal of excessive use of working capital assets in low-liquid forms. Increasing the level of liquidity of assets allows you to avoid the risk of insolvency of the enterprise in the future period. However, such risk avoidance deprives additional income from expanding the volume of sales of products on credit and partially generates new risks associated with a violation of the rhythm of the operating process due to a decrease in the size of insurance stocks of raw materials, materials, finished products;

Refusal to use temporarily free monetary assets in short-term financial investments. This measure avoids deposit and interest risks, but creates inflationary and loss of profit risks.

These and other forms of financial risk avoidance deprive the enterprise of additional sources formation of profit, and, accordingly, negatively affect the pace of its economic development and the efficiency of the use of equity capital. Therefore, in the system of internal mechanisms for neutralizing risks, their avoidance should be carried out very carefully under the following basic conditions:

Diversification is

If the rejection of one financial risk does not entail the emergence of another risk of a higher or unambiguous level;

If the level of risk is incomparable with the level of profitability of a financial transaction on a “profitability-risk” scale;

If financial losses this species risks exceed the possibility of their compensation at the expense of the enterprise's own financial resources, etc.

Limiting the concentration of risk is setting a limit, i.e. spending limits, sales, loan and so on. Limiting is an important technique for reducing the degree of risk and is used by banks when issuing loans, when concluding an agreement on an overdraft, etc. business entities, it is used when selling goods in loan, granting loans, determining the amount of capital investment, etc.

Diversification is

The mechanism for limiting the concentration of financial risks is usually used for those types that go beyond their acceptable level, i.e. on financial transactions carried out in the area of ​​critical or catastrophic risk. Such limitation is implemented by establishing appropriate internal financial standards at the enterprise in the process of developing a policy for the implementation of various aspects of financial activity.

The system of financial regulations that ensure limiting the concentration of risks may include:

The maximum size (specific weight) of borrowed funds used in economic activities;

Diversification is

The minimum size (share) of assets in a highly liquid form;

The maximum amount of a commodity (commercial) or consumer loan provided to one buyer;

The maximum amount of a deposit placed in one bank;

Maximum size attachments funds in securities one issuer;

Maximum period diversion of funds into accounts receivable.

Diversification is

Risk hedging is used in banking, exchange and commercial practice to refer to various methods of currency risk insurance. In domestic literature, the term " risk hedging» began to be used in a broader sense as risk insurance against adverse price changes for any inventory items under contracts and commercial transactions involving deliveries (sales) goods in future. A contract that serves to insure against the risks of changing rates ( prices) is called " hedge”, and the economic entity that carries out the risk is a “hedger”.

There are two risk hedging operations: upside hedging and downside hedging.

An up-risk hedge, or buy risk hedging, is an exchange transaction for the purchase of futures contracts or options. An upward hedge is used in cases where it is necessary to insure against a possible increase prices(courses) in the future.

Downward hedging, or selling risk hedging, is an exchange transaction with the sale of a futures contract. A hedger who hedges down risk expects to sell in the future product, and therefore, by selling a fixed-term contract or on the exchange, he insures himself against a possible price reduction in the future.

Diversification is

Depending on the types of derivatives used valuable papers The following financial risk hedging mechanisms are distinguished: risk hedging using futures; risk hedging using options; risk hedging using the “ ” operation.

Distribution of risks. The mechanism of this direction of minimizing financial risks is based on their partial transfer (transfer) to partners in individual financial transactions. At the same time, the economic partners are transferred to that part of the financial risks of the enterprise, for which they have more opportunities to neutralize their negative consequences and have more effective ways internal insurance coverage.

Diversification is

Diversification is the process of allocating capital among different entities attachments that are not directly related to each other. Diversification is the most reasonable and relatively less costly way to reduce the degree of financial risk.

The following main directions of risk distribution have become widespread:

Distribution of risk between the participants of the investment project. In the process of such distribution, the enterprise can transfer to contractors the financial risks associated with non-fulfillment calendar plan construction and installation works, low quality of these works, theft of building materials transferred to them and some others. For an enterprise that transfers such risks, their neutralization consists in reworking works at the expense of the contractor, payment of the amounts of forfeits and fines and other forms of compensation for losses incurred;

Diversification is

Distribution of risk between the enterprise and suppliers raw materials and supplies. The subject of such distribution are, first of all, financial risks associated with the loss (damage) of property (assets) in the process of their transportation and loading and unloading operations;

Distribution of risk between the participants of the leasing operation. So, with operational leasing, the enterprise transfers to the lessor the risk of obsolescence of the used asset, the risk of losing its technical productivity;

Distribution of risk between the participants of the factoring (forfaiting) operation. The subject of such distribution is primarily the credit risk of the enterprise, which in its predominant share is transferred to the relevant financial institution - commercial bank or factoring company.

Diversification is

Self-insurance (internal insurance). The mechanism of this direction of minimizing financial risks is based on the reservation by the enterprise of a part of financial resources, which makes it possible to overcome the negative financial consequences for those financial transactions for which these risks are not associated with the actions of counterparties. The main forms of this direction of neutralizing financial risks are:

Formation of the reserve (insurance) fund of the enterprise. It is created in accordance with the requirements of the legislation and the charter of the enterprise. At least 5% of the amount of profit received by the enterprise in the reporting period is directed to its formation. period;

Formation of targeted reserve funds. An example of such formation is a price risk insurance fund; markdown fund goods at trade enterprises; bad debt collection fund, etc.;

Diversification is

Formation of a system of insurance reserves of material and financial resources for individual elements of the current assets of the enterprise. The size of the need for insurance reserves for individual elements of current assets (materials, finished products, cash) is established in the process of their rationing;

Undistributed balance of profit received in the reporting period.

Risk insurance is the most important method of risk reduction.

The essence of insurance is expressed in the fact that he is ready to give up part of his income in order to avoid risk, i.e. he is willing to pay to reduce the risk to zero.

Currently, new types of insurance have appeared, for example, title insurance, business risk insurance, etc.

Title - legal ownership of, having a documentary legal side. Title insurance is insurance against events that have occurred in the past, the consequences of which may affect the future. It allows buyers of real estate to count on compensation for losses incurred in the event of a court order agreements purchase and sale real estate.

Entrepreneurial risk is the risk of not receiving the expected income from entrepreneurial activity. The sum insured must not exceed the insured value of the entrepreneurial risk, i.e. the amount of business losses that the insured would be expected to incur in the event of an insured event.

Other methods for minimizing the degree of risk may include the following:

Providing demand with counterparty for a financial transaction of an additional level of risk premium;

Receipt from counterparties certain guarantees;

Reducing the list of force majeure circumstances in contracts with contractors;

Ensuring compensation for possible financial losses due to risks due to the envisaged system of penalties.

Diversification in the stock markets

Diversification of a portfolio of securities - the formation of an investment portfolio from a certain set of securities in order to reduce possible losses in the event of a decrease in the price of one or more securities.

Also diversification portfolio of securities on stock market can be used not only to protect against a possible decrease in the value of certain securities included in the investment portfolio, but also to increase the overall return of the portfolio.

Some securities selected in the portfolio in accordance with the investment strategy may demonstrate significantly better dynamics than other securities, which in general may favorably affect the overall return on the investment portfolio.

In the process of forming an investment portfolio for stock market arise next questions: how many securities should be in the investment portfolio and what should be the proportion of shares of each issuer in this portfolio?

There is no unequivocal answer to this question, because even 2 securities are already a kind of portfolio.

Some investors, such as W. Buffett, believe that an investment portfolio should not contain more than 3-5 shares of various companies.

Diversification, in their opinion, which includes investing in weak industries, is likely to show mediocre results close to the market average.

Diversification is most often seen as a way to reduce risk.

At the same time, this can significantly affect the rate of expected profit for the portfolio - the more diversified the investment portfolio, the lower the overall rate of return for the portfolio can be.

Each time, adding another stock to the investment portfolio, investor thus lowering the overall average expected over the entire investment portfolio.

Thus, while protecting our portfolio from certain risks, diversification also reduces the potential total portfolio of securities.

In addition, the more stocks included in an investment portfolio, the more carefully such a portfolio will have to be monitored.

On the other hand, Peter Lynch, the well-known manager of the Fidelity Magellan Fund, during the formation and management his investment portfolio included about 1000 shares in his portfolio.

Yield for such a portfolio it exceeded the market average.

Personally, I think that it is worth building your investment portfolio from the shares of 8-12 issuers, this will be quite enough to diversify risks without significant harm to the potential rate of return on the portfolio.

If you believe that you are capable of sufficiently high-quality and accurate

analysis of companies when forming an investment portfolio and have sufficient experience and necessary knowledge for this, then select the most promising shares of several issuers from the total number in accordance with your investment strategy.

If you do not have sufficient knowledge, you can rely on the opinion of financial experts if they seem logically reasonable and justified to you, or form your investment portfolio from the most liquid securities included in.

The proportion of shares issuer in the investment portfolio

There is no single answer to this question either.

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There are several ways to determine the share of shares in the formation of an investment portfolio:

In proportion to the market capitalization of the company;

In proportion to the free float of the company's shares;

Based on potential returns and forecasts of the future value of shares;

Compilation of a portfolio of shares from equal shares.

Each of these methods has its own specific subtleties and nuances.

It is up to you to decide which way to form the share of shares of each issuer in the investment portfolio.

When forming an investment portfolio on the principle of equal shares, the share of shares of each issuer in the portfolio has the same weight.

For example, it could be a stock portfolio of 10 issuers with a respective share of the total portfolio of 10%.

In this case, when forming a portfolio, stocks are selected that meet certain criteria in accordance with our investment strategy, for example, with the highest dividend yield or with the maximum potential return.

In this case, the portfolio is also balanced when it is more convenient for you, for example, once a quarter, and the shares of each stock in the total value of the portfolio are aligned.

At the same time, changes will periodically occur in our investment portfolio - those shares that no longer satisfy our investment strategy will be excluded from the portfolio, and instead of them new ones will appear with the same share in the total portfolio that meet our criteria.

And do not forget about the principles of investment portfolio diversification, and why diversification is necessary.

Diversification in the foreign exchange markets

Risk diversification or, in other words, risk distribution is an integral part of trading in the foreign exchange market.

As is known Forex currency market very often comes into motion due to unforeseen events and the human factor. Often a trader cannot predict in which direction prices will move in the near future. Thus, trader you need to have a truly diversified portfolio of investment strategies. Trader must learn to sacrifice a portion of the potential maximum profit of the net asset portfolio in order to conserve capital during periods of fluctuation Forex currency market.

All traders understand that trading in the foreign exchange market carries some risk. While portfolio diversification may seem extremely easy, it is not. Since most novice traders lose a significant part of their funds.

Due to the fact that in the Forex market all traders trade on a margin basis, this allows them to use huge leverage with minimal requirements. The most commonly used leverage is 1:100. The leverage provided can serve as a powerful tool for a trader, but this medal has two sides. While leverage does contribute to the risk of a trader's position, it is a necessary measure to operate in the Forex market. This happens solely because the average daily movement in the market is 1%.

Precisely because the Forex market is of such a nature, everyone should diversify their risks within their trading accounts. Diversification can be achieved through the use of various trading strategies. As a diversification option, the transfer of a part of trading assets to control other traders. The point here is not that another trader will have a better result than you, but that diversification will be achieved in this way. Regardless of how much trading experience you have, you will still have periods of ups and downs. That is why having more than one trader will slightly reduce variability trading portfolio.

Naturally, in addition to the opportunity to give part of the capital to the management of another trader, this is not the only option for diversifying risks to the international Forex currency market. There are a huge number of strategies and trading theories, as well as a huge number of ways to diversify the risks associated with trading on the international Forex currency market.

There are a sufficient number of different currency pairs on the international Forex currency market, each of which has its own volatility. For example, everyone's favorite pair USD - CHF is generally recognized as a safe haven, and, for example, GBPJPY is an unbroken stallion galloping long distances in points, which indicates both high potential profits and losses. Thus, "laying eggs in two different baskets" - dividing the capital for trading into these two pairs, you can easily reduce the risks if the trader prefers aggressive trading.

Technically, a diversified portfolio should consist of uncorrelated assets, i.e. unrelated (in practice, minimally related) assets. Therefore, it is quite difficult to diversify your assets in the conditions of one market. With regard to semantics, it would be more correct to speak of risk hedging in the international Forex market, rather than diversification.

Diversification, like any other money management method, has a significant disadvantage - with a decrease in risks, the potential income also decreases. Therefore, people often speak negatively about diversification, believing that it is necessary to deal with one area - if you win, you will win a lot and immediately, but if you lose ... This is where the thought ends.

In practice, competent diversification involves investing in the real sector of the economy (trading in goods, providing services) and financial instruments, whether it be securities, deposits or trading on the international Forex market. Not for nothing, more and more often you can hear advice to invest as much as you can afford to lose. It is purely psychologically difficult to bear huge losses, realizing that this is the main thing and without it life will turn into slavery, therefore it is strongly recommended to cover the rear, having a constant source of income outside the Forex currency market.

Diversification in commodity markets

Traded commodities are divided into five main groups: energy - which includes crude, oil products, gas; metals - in turn subdivided into industrial (, zinc, aluminum, etc.) and precious (, silver,); cereals - corn, soybeans, rice, oats, etc.; food products and fibers - cocoa, sugar, etc.; animal husbandry - live cattle, pork, . Similar to stock indices, the overall performance of commodities can be tracked by commodity indices. Difference between indices are mainly related to the weights of certain groups of goods included in the calculation of the index.

Main indices raw materials markets are: CRB - ​​17 types of raw materials with the same weights are taken into account in the calculation; Dow Johns - AIG commodity index - the weight of each product is set depending on the volume of exchange transactions over the past 5 years; GSCI - weight corresponds to the share of each product in world production; RICI - reflect the share of goods in world trade. The low growth rates of the world economy and, as a result, rather low growth did not contribute to the high return on investment in commodities in the last two years - in fact, only soy flour overtook the S&P 500 index for this. Nevertheless, in the near future, the acceleration of economic growth and inflation make it a desirable investment.

The diversification strategy involves a dynamic change in the structure of the portfolio depending on the market conjuncture. During the period of growth world economy the emphasis is on fast-growing commodities (fertilizers, industrial metals, energy resources), during the period of crisis, protective assets are used, such as gold and silver.

Advantages of the strategy:

A raw material is a real asset that will always be in demand in the market and have a certain value;

A long-term positive trend is emerging in the world market for a reduction in supply and an increase in demand for commodities, especially from the Asian region;

Investing in commodity assets is an excellent insurance option against the global inflation and the depreciation of the United States dollar;

Some commodities such as gold, historically used as a defense against crises and inflation due to low correlation with financial markets.

Capital management in the commodity markets of the world is the preservation and increase of capital and risk insurance, and one of the main steps towards creating your own diversified investment capital.

Production diversification

In economic practice, a large number of strategic alternatives for the development and growth of firms in market conditions can be offered. One such alternative is diversification.

There are many definitions of diversification in the economic literature. But the difficulty lies in the fact that diversification is such a concept that cannot be given an unambiguous definition. Different people mean by it different processes, therefore important point is the ability to recognize and interpret this concept in relation to one's circumstances. Nevertheless, it is possible to give a fairly general, broad definition of diversification, but with some remarks. This will provide a definite basis for further analysis. It is well known that from an economic point of view, diversification (from the Latin diversus - different and facer - to do) is the simultaneous development of several or many unrelated technological types of production and (or) services, expansion of the range of manufactured items of trade and (or) services.

Diversification enables firms to "keep afloat" in a difficult economic environment. conjuncture at the expense issue of securities a wide range of products and services: losses from unprofitable trade items (temporarily, especially on new ones) are covered by profits from other types of products. Diversification is: firstly, the penetration of firms into industries that do not have a direct industrial connection or functional dependence on the main industry of their activity.

Secondly - in a broad sense - the expansion of economic activity into new areas (expanding the range of products, types of services provided, etc.). Diversification of production and entrepreneurial activity, being a tool for eliminating disproportions in reproduction and redistribution of resources, usually pursues various goals and determines the direction of restructuring corporations and the economy as a whole.

This process concerns, first of all, the transition to new technologies (developments), markets and industries to which the enterprise had nothing to do before; in addition, the products (services) of the enterprise itself must also be completely new, and, moreover, new financial resources are always needed.

Diversification is associated with a variety of applications for the products manufactured by the company, and makes the efficiency of the company as a whole independent of life cycle individual product, solving not so much the problem of the company's survival as ensuring sustainable progressive growth. If a company's products have a very narrow application, then it is specialized; if they find a variety of uses, then this is diversified.

Diversified companies differ depending on the classification of their product range in relation to the technologies used and sales features.

This classification applies only to currently released products or services and does not affect changes to the product or service. In market conditions, the attribution of an enterprise to one type or another is absolute at the moment and relative in the long term, since over time a specialized enterprise can be transformed into a diversified one and vice versa.

The ideal activity of any firm, as you know, is to prevent possible failures and losses in productivity, which can be obtained from various company forecasts regarding these particular indicators. The need for diversification can be identified by comparing the desired and possible levels of performance and the level that has been achieved as a result of the company's activities. For less successful companies that do not (or cannot) plan for the future, the first sign of such a performance gap is often a shrinking backlog or idle capacity.

In each case, a number of reasons for diversification may play an important role, but the weaker influence of other reasons may ultimately lead to a different solution to the problem. I. Ansoff believes that the main reason is the discrepancy between the proper level of productivity and efficiency.

All the reasons for diversification are caused by one thing - to increase the efficiency of the enterprise, not only at the moment or in the near future, but also in the long term.

There is a diversification criterion. The establishment of such a criterion is recommended only for an enterprise that is really interested in its diversification. This first essential "cover" is invaluable, as it prevents various errors and, in addition, can serve as a program for security and good control.

The process of developing a diversification assessment and plan takes time, effort, and careful study. A conclusion that was made in one evening cannot be the basis for market research, technical research of processes and products, financial analysis, even any meeting and the services of external experts to provide any information. Indeed, it is necessary only as a basis in order to decide at the very beginning whether or not to deal with this problem seriously. The assessment may show that all this is really good, but not for this company.

Types of production diversification

Relationship between financial position corporations and diversification of activities is quite simple, since the first determines the direction and effectiveness of the second. Thus, the directions of diversification, characteristic of the initial stages of development, relied on an objective basis - the alternative use of waste, production facilities, trade and commercial network, and were closely related to the financial capabilities of traditional production.

The difference between the next stages of diversification was to reduce the role of the main production, was not limited to expansion into their own or related industries and was accompanied by a complete separation of financial interests from the interests of production. As it develops, corporations, and diversification itself, the goals of extracting profit were achieved by expanding the possibilities of migration of resources outside the industry, region, national economy. Therefore, two directions in the development of entrepreneurial activity can be easily explained by the evolution of the process from related diversification to unrelated or "autonomous".

The classic definition given in the small explanatory dictionary of foreign words: "A holding company (a holder company) is a company that owns a controlling stake in any other enterprises in order to control and manage their activities." It reveals the essence of the classical understanding of the holding (from an economic point of view) - there are shareholders who own shares, who either manage the holding structure themselves, or entrust the management of the common business to the management company.

Horizontal holdings - association of enterprises homogeneous businesses (energy companies, sales, telecommunications, etc.). They are, in fact, branch structures managed by the head (parent) company.

vertical holdings- association in one production chain (extraction of raw materials, processing, release consumer products, marketing). Examples: trusts involved in the processing of agricultural products, metals, oil refining.

Mixed holdings are the most complex example. This includes structures that are not directly related to trade or production relations, such as Russian banks that invest in some enterprises. Their main task is to invest funds somewhere and then withdraw them with profit in a timely manner. Essentially, these are investment projects.

Diversification is

As for the types of holdings, it is necessary to specify some concepts. The classification can be modified in several ways:

Diversified holdings (mixed) - association of enterprises of unrelated businesses. (A typical example is when banks buy up shares of different enterprises)

Sales holdings (horizontal). They really have the main thing - a single: a single system suppliers and many sales cells. If there are many cells, then a standard for creating a new sales point is needed (and automation must support it). From the point of view of logistics, the specifics of the holding is that the recipient is dispersed. There are always leftovers in the warehouses of marketing cells and the task is to redistribute them. A single policy for a specific type of product is possible (implemented in the form of discounts, gifts for customers, etc.). In this case, the centralization of management plays an important role in the development of a common politicians elimination of residues.

If the holding wants to consolidate everything correctly (in terms of taxes and management accounting), then a single standard for document flow should be established in it. This will allow, in particular, to conduct a single marketing research directly in the sales process. (Particularly interesting results are obtained precisely when there are many sales outlets. You can identify the dependence of demand on the region, location, national specific preferences) With proper use of this aggregated marketing information it is possible to avoid residues and illiquid assets in warehouses. This is very important for trading holdings. Thus, the advantages of a single supply and marketing network are that it becomes possible, firstly, to purchase a product from suppliers at lower prices (cumulative discount), and secondly, to conduct a single sales and marketing politics and, thirdly, to flexibly and promptly redistribute balances in warehouses, preventing the formation of illiquid assets (cost savings).

Group holdings. They are characterized by a chain of processing uniting them from raw materials to the finished product. In this case, there are some peculiarities:

Enterprises transfer theirs to each other at the original cost (there is no point in cashing in on each other);

Throughout the chain, it is necessary to ensure end-to-end quality management (up to the introduction of ISO 9000);

All enterprises concern must be balanced in terms of the level of equipment of production processes, qualifications of personnel, etc.

That is, one of the most common ways of combining enterprises into diversified corporate associations is the organization of a holding. The implementation of this scheme allows you to clearly resolve all problems in the ownership structure and the system of relationships in the corporate hierarchy.

Thus, the most appropriate response to the globalization of the economy is business diversification and the creation of diversified corporate trusts.

The main goal of diversification is usually to ensure the survival of the organization, strengthening its competitiveness and increasing profitability. Any commercial company is trying to stay "afloat" and, accordingly, is looking for how to achieve this. It is diversification, the search for new areas of effective activity that allows the company to accelerate its development, obtain additional income and gain new competitive advantages.

It is generally accepted that the diversification of the company - whether it is the expansion of the scope of activities by opening new production facilities or the acquisition by the holding of subsidiaries of various profiles - is a double-edged phenomenon. And in each case, the management, choosing the direction of development, should consider both positive and negative consequences.

There are two main types of diversification - related and unrelated.

Related diversification is a new area of ​​activity for a company that is related to existing areas of business (such as manufacturing, marketing, procurement, or technology). There is an opinion that related diversification is preferable to unrelated diversification, because the company operates in a more familiar environment and takes less risk. If the accumulated skills and technologies cannot be transferred to another structural unit, and there are not so many opportunities for growth and development, it may make sense to take risks and the company should resort to unrelated diversification.

Unrelated diversification is expressed in the movement of the firm into an area other than the existing business, to new technologies (developments) and market needs. It is aimed at obtaining greater profit and minimizing entrepreneurial risks. With the help of this strategy, specialized firms are transformed into diversified complexes-conglomerates, the constituent parts of which do not have functional links with each other. Unrelated diversification is more difficult than related diversification.

As the organization enters a hitherto unknown competitive field, it must master new technologies (developments), forms, methods of organizing work and much more, which she had not encountered before. That is why the risk is much higher here. The entire post-Soviet space can serve as an example of such diversification. During the times of perestroika and cooperatives, many residents of the country were engaged in the production of clothing, everyday products and at the same time were engaged in the supply of products and goods from abroad. In this regard, it can be considered possible to assert that almost the entire population of the post-Soviet space, to a greater or lesser extent, has experienced the charms and hardships of unrelated diversification.

In practice, both large-scale, related or unrelated diversification and local, experimental microdiversification are widely used. The latter is implemented in the form of the introduction of individual elements of large-scale diversification, which can later be formed into an independent production unit. It is local, small experimentation that can subsequently give life to a new large-scale production.

But it should be borne in mind that diversification is a very time-consuming and complex process that can bring not only dividends, but also problems and losses.

Most companies turn to diversification when they create financial resources in excess of what is needed to maintain competitive advantage in primary business areas.

Diversification can be done in the following ways:

Goals:

Economic stability and financial stability;

Profit;

Competitiveness.

All these motives can exist separately, but they can also be combined with each other - it depends on the specific circumstances in each company, therefore, the choice of the form of diversification must be well justified and carefully planned in accordance with these circumstances.

In general, there are three types of diversification opportunities.

Each product offered by the company must consist of functional components, parts and basic materials, which will subsequently form a single whole. Usually, in the interests of the manufacturer, a large proportion of these materials are purchased from external suppliers. One of the well-known ways of diversification is vertical diversification, which is characterized by the expansion and branching of components, parts and materials. Perhaps the most striking example of vertical diversification is the Ford empire during the time of Henry Ford himself. At first glance, vertical diversification may seem inconsistent with our definition of a diversification strategy. However, the respective missions that these components, parts, and materials must fulfill are fundamentally different from the mission of the entire end product. Moreover, the technology for the development and production of these parts and materials is also likely to differ significantly from the technology for the production of the final product. Thus, vertical diversification implies both the acquisition of new missions and the introduction of new products into production.

Another possible variant- horizontal diversification. It can be characterized as the introduction of new products when they do not fit in any way with the existing product range, and acquire missions that match the company's know-how and experience in technology, finance and marketing.

It is also possible, through lateral diversification, to go beyond the industry in which the company operates. If vertical and horizontal diversification, in fact, are constraining (in the sense that they limit the sphere of interest), then lateral diversification, on the contrary, contributes to its expansion. By doing so, the company declares its intention to change its existing market structure.

Which of the following diversification options should the company choose? In part, this choice will depend on the reasons that prompt the company to diversify. For example, with taking into account industry trends, there are several steps an airline can take to achieve its long-term implementation goals through diversification:

The direction contributes to the technological progress of the currently existing type of production;

Diversification increases coverage of segments of "military" markets;

Direction also increases percent commercial sales in the overall implementation program;

The movement stabilizes the sale of products in the event of an economic downturn;

The move also helps expand the company's technology base.

Some of these diversification goals relate to product features and some to product missions. Each of the goals is intended to improve some aspect of the balance between the overall product-market strategy and the environment. Specific targets set for some specific situations can be grouped into three main categories: growth targets, which should help to balance the balance in the face of favorable trends; stabilization goals designed to protect against unfavorable trends and predictable phenomena, flexibility goals - all to strengthen the company's position in the event of unpredictable events. The diversification direction necessary for one of the goals may be completely unsuitable for another.

The goals of production diversification directly depend on the financial condition and production capabilities of the corporation.

Problems of enterprise diversification

Assessing and planning for diversification takes time, effort, and careful study. A thorough analysis of the enterprise is necessary in order to determine at the outset whether or not the enterprise should be diversified. Diversification is a very time-consuming and complex process that can lead not only to dividends, but also to problems and losses.

Diversification of production is usually characterized by the transition to new technologies (developments), markets and industries, in addition, the products (services) of the enterprise are completely new, so the risk is very high.

Diversification depends on the financial condition of the company. So weak or emerging companies are unlikely to conquer new markets or enter the international arena. Also, the new product of the enterprise must be competitive. Diversification requires significant financial investment.

80% of the time spent brings only 20% of the results. Based on this, before the start of implementation, it is necessary to analyze the most favorable types of possible diversification, which promise to bring the maximum income at the minimum cost of time, material and human resources.

From the foregoing, we can conclude that you need to think about diversification constantly. Both the market situation and the political situation can change at any moment: introduction or cancellation of licensing; establishment or increase of customs taxes; imposing bans on the production of certain products. All this will entail the complication of marketing, increased competition, the need to terminate one or another type of activity.

Therefore, when starting production, you need to immediately think over new options for work, types of goods, etc. So far, in practice, everything happens exactly the opposite. Current activities often do not allow businessmen plan other areas of work. As a result, when enterprises are faced with a sharp decline in sales, the only traditional measure is to reduce the number of employees who have spent years and years on training.

Diversification of trading risks

Often, when creating trading strategies, traders are chasing the maximum profitability of the system. However, it is more important not to increase the value of expected profitability, but to reduce the possible risk, which is expressed in the maximum allowable drawdown.

A simple but relatively reliable way to evaluate the effectiveness of a trading strategy is to determine the ratio of profitability to the maximum drawdown of the system over the period under study, the so-called recovery factor. For example, if profitability system 45% per annum, and the maximum drawdown is 15%, the recovery factor will be 3.

If we compare two systems with different values ​​of returns and drawdowns, then the system with a higher recovery factor will be better. A system that gives 30% per annum with a drawdown of 5% will be better than a system with 100% per annum and a drawdown of 40%. can be easily adjusted to the desired value using margin lending, but the share of risk in the system's profitability cannot be changed, this is an integral property of the system. By increasing , we increase the risk accordingly.

However, you can reduce the risk for the portfolio as a whole if you apply diversification, that is, trade not one separate strategy, but a whole set, dividing the capital between systems. In this case, the drawdown of each individual system does not necessarily coincide with the drawdowns of all other systems in the set, so in the general case, we can expect a smaller maximum cumulative drawdown, while at the same time, the profitability of the systems will only be averaged. If the systems are sufficiently independent of each other (different trading strategies are used, different instruments are traded), then the drop in equity in one of the systems will most likely be compensated by an increase in equity in some other system. The more independent trading strategies and trading tools, the more the overall risk is eroded.

There are even situations when it makes sense to add a deliberately unprofitable strategy to the portfolio. Although the overall portfolio performance will decrease somewhat, it may turn out that the risk will decrease even more, and the overall performance of the portfolio will increase.

Theoretically, if you add more and more strategies and instruments to your portfolio, you can get an arbitrarily small risk, and, accordingly, an arbitrarily large efficiency. However, in practice, such an intention will inevitably run into the problem correlations between different strategies and tools.

The main directions of possible diversification are as follows:

Diversification by trading strategies;

Diversification by parameters of trading strategies;

Diversification by trading instruments;

Market diversification.

Diversification by trading strategies

Each trading strategy is based on some common property of the market or traded instrument, which can be used to make a profit. For example, the property of the market to form trends or the property of the price to continue moving after the breakdown of a strong resistance level.

Diversification is

If there are several systems based on fundamentally different considerations, then capital diversification between these systems can provide a significant reduction in risk. Indeed, according to the internal essence of the system, they can arbitrarily differ from each other, and arbitrarily weakly correlate with each other. If, for example, trend-following systems and systems on level breakouts are somehow similar to each other and often give similar equity, then trend-following and counter-trend systems, on the contrary, will even show negative correlation. Where the trend-following system will be sawn, the counter-trend one will show, respectively, the overall risk of the portfolio will decrease significantly.

Diversification of this kind, theoretically, has no limits on depth and depends only on the creative abilities of the trader to create systems. Therefore, it is important to constantly continue to work on finding new trading strategies, since it is in this direction that the most reliable way to increase the efficiency and profitability of trading lies.

Diversification by parameters of trading strategies

Let's take a simple trend-following strategy based on the breakdown of the price channel. Its main and only parameter is the number of bars for which the high and low prices are calculated. If the maximum is updated, we consider this a signal for the beginning of the trend and buy. We hold the position until the minimum is updated, which we consider the beginning of a downtrend and turn the position into shorts.

Diversification is

This simple strategy gives good results on instruments prone to trending movements. Suppose, for example, that this strategy gives satisfactory results in the range of parameter changes from 10 to 100 bars. Usually, traders limit themselves to determining the parameter at which the strategy shows itself most effectively, and start trading one separate system with this setting. However, if you divide your capital and trade the same strategy at the same time, but with different parameters, you can get more stable results.

For example, if we take three systems with a channel length of 10, 30 and 100 bars, different systems will work out trends of different sizes. A system with a long channel will take long trends well, leaving small ones unattended. A short channel system will work well with short trends. As a result, the market volatility will be processed more efficiently, the equity of all three systems will be different, which means that the risk of such a diversified portfolio will be lower.

In addition, by limiting trading to a single strategy with specific parameters, we increase the risk that it will fail simply because the market moves in an unfortunate way for that system. By diversifying capital according to different parameters, one can expect results close to a certain average efficiency of the strategy, without the risk of running into an unfortunate combination of specific market circumstances.

If, for some reason, the system is strictly tied to the number of bars, and you cannot find a parameter that can be changed, you can try changing the timeframe.

As a rule, a successful strategy allows you to build profitable systems in a fairly wide range of parameters, which, however, is limited. Since transactions are not free and have their own price (broker commission, slippage, spread), it is unprofitable to catch small market fluctuations, since the expected profit becomes commensurate with the price of the transaction. On the other hand, too long market fluctuations are unlikely to be of interest to short-term players.

It turns out that diversification by parameters has its efficiency limit, since the limited area of ​​​​parameters means the limited market movements from which one or another particular strategy can profit. And this efficiency will be the higher, the better the idea underlying the trading strategy corresponds to the behavior of the market.

Diversification by trading instruments

It is logical to expect that the prices of different instruments will move differently. The price of shares is strongly influenced by internal corporate news, changes in the situation around the company. Of course, each company has its own situation, and it develops in a separate way. Therefore, it seems quite reasonable to divide the capital and trade the strategies available in the trader's arsenal on various instruments.

On the other hand, there is a general economic background that causes different stocks in the same market to move more or less in sync. Events and trends in a particular economy similarly affect sentiment players And investors.

In order to understand these risks and learn how to defend against them, let's look at the main types of diversification.

Instrumental diversification

This is the most common type of investment protection and risk insurance. In fact, this is exactly what you and I used to understand by proper "diversification". In a nutshell, this implies the need to have investments not in one asset, but in several different instruments. And the more risky assets, the smaller part of the portfolio should be trusted to them. For example, if a portfolio contains several PAMM accounts and individual traders, it can be considered instrumentally diversified.

The risk that such a measure protects against is a partial (or even complete) drop in price of one (or several) assets. We have already observed the advantages of instrumental diversification during the depreciation of such an asset as investments in Devlani. At that time, I was already fully aware of the risks inherent in this instrument, and held only about 10% of the portfolio in it. As a result, despite the fact that my local deposit reduced to a meager figure, I have not lost anything except profit over the past few months, which by now, by the way, has already fully recovered (and I do not need to wait for the compensation account to close, like some people). This was due to the fact that other assets in my portfolio continued to work and make a profit.

But enough about the obvious - let's turn to something that few really think about.

Currency diversification

Already more interesting. Since we are mainly dealing with investing in the international Forex market - the international over-the-counter international Forex currency market, we know that the exchange rates of various states are unstable and are in constant motion. This is due to the fact that exchange rates the main states and blocs have long been not tied to gold reserves or even GDP or the foreign trade balance of a particular country, but are in the so-called "free floating" - their rates are determined by market mechanisms, demand and offer for one currency or another. This, in fact, is the essence of the foreign exchange market.

We also know that the main currency quotes, which are used for most transactions on Forex, are the rates US dollar: USD/CHF, GBPUSD, EURUSD, USDJPY, and so on. Transactions in which U.S. $, the Forex market is much larger than any other - both in terms of volume and quantity. Accordingly, traders open most trading accounts in this currency - although brokers, as a rule, offer a choice of and, and sometimes even more exotic currencies- a pound, for example, or even gold.

Now let's imagine that we have invested in 10 managed accounts, and all of them are denominated in US dollars. And suddenly, waking up one morning, we hear the following news: USA announced a technical default on its debt obligations - bonds with various maturities, treasury securities, etc. Now it seems unlikely to you? Understand. And remember July of this year (2011) - in size external debt USA even serious economists were seriously alarmed, and Republicans and Democrats could not agree on raising the acceptable ceiling of public debt, and large state banks (for example, China) began to slowly get rid of doubtful US debt obligations. Even the very rumors of such events have a powerful effect on exchange rates, not to mention the fact that the event had every chance of happening. And what do you think - the size of the US national debt has decreased since then? No matter how. The problem was hidden, but not solved. And what is happening at this time in the Eurozone? At the moment, even those who are not interested in Forex and politics have heard about the debt problems of Greece and other PIIGS countries that can sink the entire Eurotitanic, and first of all the single eurocurrency. As well as the inability of the government and influential financial circles euro union to coordinate their actions to quickly resolve these problems.

But back to our hypothetical situation. As it turned out, our "well-diversified" portfolio of 10 PAMMs depreciated anyway - despite the seemingly competent instrumental diversification... No, of course, the numbers on our balance sheet, in US dollars, remained the same. Except that the value of those dollars has gone to zero or so, which means we're still left with nothing.

Solution? Currency diversification involves the creation of assets in various currencies- so you will be less dependent on their fluctuations, or on the risk of a catastrophic fall of a particular currency. Even dividing their assets equally between dollar And Euro, You will already be ready for global catastrophes - since EURUSD is currently the most traded currency pair into the international Forex market, then a sudden and strong fall in one of these currencies will automatically lead to an increase in the other, as large investors, central banks, hedge funds and other market makers will hastily transfer foreign exchange reserves to the other side, and this will lead to an increase the volume of purchases of the second currency, and consequently, the growth of its value. And most likely, this will happen even before the thunder actually breaks out - as a rule, the people responsible for making such decisions in the aforementioned organizations are well aware of upcoming events in advance.

Of course, in today's world, neither the United States nor Euro cannot be considered stable currencies. Ideal assets today are gold and the Swiss Franc. Unfortunately, I have not yet seen PAMMs nominated in Franke. But in gold, some accounts on Alpari are already open. The choice is not rich yet, but this type of accounts is gradually gaining popularity. As for , one of the most famous accounts that has been trading in euros for three years now is Invincible Trader, and from ruble PAMMs, I recommend the Baffetoff scalper. By the way, he also has an account in euros, however, with an identical strategy.

Institutional diversification

The words are getting scarier, but don't worry, now we'll figure it out.

So, you and I successfully coped with the fall of one or several assets, and even foresaw such a global event as the fall of world currencies. We distributed our funds among 10 Alpari PAMM accounts opened in different currencies and went to bed peacefully.

The next morning, when we wake up, we are surprised to learn that Alpari ceases to exist due to (for example) any litigation with its market makers (suppliers liquidity), and payments on the company's obligations are deferred indefinitely.

No, God forbid, of course, the Alpari company long life, financial stability and well-being, but if the obligations of the US state, which has existed for more than 200 years and has a high credit rating of AA + (until recently, by the way, even higher "AAA") are in doubt, then what can we say about Alpari, which is only 15 years old of birth, and which exists in a country with one of the highest levels of corruption in the world.

So, we learn that although everything is in order with the exchange rates in which our assets are denominated, and traders work diligently and do not merge, we cannot withdraw our investments, and it is generally unknown when we can.

To insure such risks, there is the so-called "institutional" diversification, or the distribution of funds between various organizations.

So, we support the theory with visual material: today, PAMM accounts are opened on more than a dozen sites, and, thank God, their number is only growing from year to year.

Sources and links

coolreferat.com - Collection of abstracts

center-yf.ru - Financial Management Center

zenvestor.ru - Blog about investing

slovari.yandex.ru - Dictionaries on Yandex

en.wikipedia.org - The free encyclopedia

dic.academic.ru - Interpretation of words

elitarium.ru - Financial Management Center

bibliofond.ru - BiblioFond Electronic Library

revolution.allbest.ru - A selection of abstracts

bussinesrisk.ru - Portal about business

ankorinvest.ru - Portal for investors

Encyclopedia of the investor. 2013 .

Synonyms:

• Dictionary of business terms - diversity, change Dictionary of Russian synonyms. noun diversification, number of synonyms: 2 change (73) … Synonym dictionary



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