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dc.contributor.authorRaju, Ranjan
dc.contributor.authorAgarwalla, Sobhesh Kumar
dc.date.accessioned2022-03-01T08:56:04Z
dc.date.available2022-03-01T08:56:04Z
dc.date.issued2021-02-02
dc.identifier.citationRaju, R., & Agarwalla, S. K. (2021). Equity portfolio diversification: how many stocks are enough? Evidence from India. IIM Ahmedabad.en_US
dc.identifier.urihttp://hdl.handle.net/11718/25473
dc.description.abstractHow many stocks are required to reduce unsystematic risk significantly is an important question for investors. While there is a large body of research on the subject in the United States, there is little formal work on this question in India. We show that a 15-20 stock portfolio, the traditional market rule-of-thumb for a diversified portfolio, is likely inadequate to minimise unsystematic risk. We show that an investor could target to reduce diversifiable risk by 90% with a 90% confidence with a portfolio of 40-50 stocks. We build a practical framework that serves as a baseline for investors to target a specific reduction in diversifiable unsystematic risk at a chosen confidence level.en_US
dc.language.isoenen_US
dc.publisherIndian Institute of Management Ahmedabaden_US
dc.subjectPortfolio constructionen_US
dc.subjectDiversificationen_US
dc.subjectTime series standard deviationen_US
dc.titleEquity portfolio diversification: how many stocks are enough? evidence from Indiaen_US
dc.typeWorking Paperen_US


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