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Diversification Analysis

Diversification analysis helps you identify opportunities to reduce portfolio risk by finding assets that are least correlated with your current holdings. This tool analyzes your portfolio's correlation structure and suggests diversification candidates based on market data, asset quality, and correlation patterns.

The correlation matrix shows how each position in your portfolio relates to others, using the Spearman rank correlation method. Below the matrix, you'll find personalized suggestions for assets that could improve your portfolio's diversification.

Our suggestions are filtered to ensure quality:

For ETFs: Assets under management exceeding $100M, excluding leveraged and inverse funds.

For Stocks: Market capitalization above $1B with sufficient trading history.

All suggestions are screened to match your portfolio's geographic market and exclude delisted or low-quality securities.

Your portfolio is currently empty. You can import holdings, add them manually, or start with a popular portfolio.

What it affects

Diversification Analysis Settings

How to choose lookback

Asset Correlations Table

The table below displays the correlation coefficients between the individual components of the portfolio, the entire portfolio, and the chosen benchmark.
Chart placeholderClick Calculate to get results

How to Use Diversification Suggestions

The suggested assets in the table represent securities with low correlation to your current portfolio. Here's how to interpret and use this information:

  • Average Correlation: Shows the average correlation between the suggested asset and your portfolio positions. Lower values (closer to 0 or negative) indicate better diversification potential.
  • Sharpe Ratio: Measures risk-adjusted returns. Higher values suggest better historical performance relative to volatility.
  • Category: Helps you understand what type of asset you're considering, ensuring you maintain sector balance.

When adding new positions, consider both low correlation and strong fundamentals. The best diversification candidates combine low correlation with solid risk-adjusted returns.