diversify

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Related to Diversifiable: Diversifiable risk, Non Diversifiable Risk
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As shown in Section 2, equity in our model is simply a leveraged claim to the diversifiable income process.
Because the risk is presumably diversifiable, it is not priced under the standard capital asset pricing model (CAPM) used to develop discount rates for valuations.
Of the 37 IPSs reviewed, only four plans mentioned uncompensated risk, nonsystematic risk, or diversifiable risk.
The expression inside the expectation of Equation (2) reflects the assumption that mortality risk is fully diversifiable for the insurance company.
An example of the second reason is the addition of a premium for country risk, in the belief that the country's market is not sufficiently integrated into the world market, so that this country risk would not be diversifiable, from the perspective of an international investor.
Instead, a fiduciary must evaluate the principal's risk tolerance and investment goals, choose a commensurate level of overall portfolio market risk and expected return, and avoid wasteful diversifiable risk.
Fama and French (1992)--hereafter F&F--and Jegadeesh and Titman (1993) convincingly summarized the evidence that "diversifiable" individual characteristics, like book-to-market, size and momentum, could capture important cross-sectional variation in average stock returns.
Though the impact of this type of risk on stock prices is not fully diversifiable because it is beyond the control of the investor, the effect on the share prices may be temporary.
Notably, insurers face financial risks that are systematic because marketwide disability and lapse rates as well as business cycle conditions are not diversifiable across beneficiaries and are nearly impossible to forecast decades into the future.
By considering the tradeoff theory firm surfaces lower bankruptcy costs and large firms are no more diversifiable and borrow more.
Unfortunately, the SML only calibrates complete risk not all of which is diversifiable. Luckily, the SML provides investors a lifeline, by discerning between non-systemic and wide spread danger.
The cost of insuring a diversifiable risk is a simple calculation of the discounted value of expected (average) future damages.

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