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Keeping it Simple on the Road | Ep.6: Endeavoring to Diversify

Keeping it Simple with Simplify Asset Management

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The Importance of Diversification in Active Managers

The idea that 25 to 35 names can provide similar diversification benefits as the S&P 500 is a common one among quant asset managers. But when you do some Google searches and seeing like what people are hearing, there's this three thread of research that goes back decades. The basic idea is that every stock has some amount of systematic risk. And it doesn't take many names to have the idiosyncratic risk shrink.

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