Diversification Meaning and Definition
Diversification
Pronunciation
/dɪvərˌsɪfɪˈkeɪʃn/
Part of Speech
Noun
Definition
The act or process of increasing the number of different types of assets, investments, or businesses in a portfolio, investment, or organization, in order to reduce risk and increase potential returns.
Examples
- The company diversified its portfolio by investing in multiple industries.
- The investor diversified his assets by purchasing stocks, bonds, and real estate.
Synonyms
- Spread
- Shifting
- Extending
Antonyms
- Concentration
- Focus
- Specialization
Etymology
The word “Diversification” comes from the Latin words “diversus”, meaning “different” or “various”, and the suffix “-ification”, forming a noun.
Usage Notes
Diversification is often used in finance and business, but it can also be applied to other areas, such as art, music, or education.
Cultural References
Diversification has been referenced in various forms of media, including books, films, and TV shows.
Idiomatic Expressions or Phrases
“Spread your wings” is an idiomatic phrase that encourages individuals to diversify their skills or investments.
Related Words or Phrases
Diversification is closely related to other concepts such as risk management, asset allocation, and portfolio optimization.
Collocations
Diversification often collocates with words such as “strategies”, “approaches”, “methods”, and “techniques”.
Frequency of Use
Diversification is a commonly used term in modern finance and business, with a frequency of use that is increasing due to the growing importance of risk management and portfolio optimization.
Common Misspellings
The most common misspellings of Diversification include “Divergence”, “Diversification”, and “Diversion”.