Diversification Score
Measure portfolio spread using HHI
Portfolio
| Asset | Amount ($) | Weight | W² |
|---|
Add assets to calculate
Score
-
-
HHI:-
Effective Assets:-
Largest Position:-
Asset Count:-
0-40
40-60
60-75
75-90
90-100
Concentrated
High
Moderate
Good
Excellent
FAQ
Score 45 - bad?
High concentration. One asset likely dominates. Not necessarily bad if intentional.
Should I aim for 100?
100 = perfect equal weights. 75-85 is often sweet spot for conviction + diversification balance.
10 alts but low score?
If one is 50%, others 5% each - you're concentrated. Weight distribution > asset count.
Stablecoins count?
Yes! USDC improves score and reduces risk. Real diversification.
High score but correlated?
Valid concern. 5 equal alts = high score but crash together. Check correlation too.
Optimal asset count?
5-10 for most benefit. Beyond 15, diminishing returns. Quality > quantity.
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