dc.contributor.author | Raju, Ranjan | |
dc.contributor.author | Agarwalla, Sobhesh Kumar | |
dc.date.accessioned | 2022-03-01T08:56:04Z | |
dc.date.available | 2022-03-01T08:56:04Z | |
dc.date.issued | 2021-02-02 | |
dc.identifier.citation | Raju, R., & Agarwalla, S. K. (2021). Equity portfolio diversification: how many stocks are enough? Evidence from India. IIM Ahmedabad. | en_US |
dc.identifier.uri | http://hdl.handle.net/11718/25473 | |
dc.description.abstract | How 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.iso | en | en_US |
dc.publisher | Indian Institute of Management Ahmedabad | en_US |
dc.subject | Portfolio construction | en_US |
dc.subject | Diversification | en_US |
dc.subject | Time series standard deviation | en_US |
dc.title | Equity portfolio diversification: how many stocks are enough? evidence from India | en_US |
dc.type | Working Paper | en_US |