Diversification Engine

Balance, without becoming boring.

Diversification is not about owning a hundred things. It is about owning the right shape. InvestmentLens studies your allocation and proposes educational adjustments — not orders, ideas.

Four axes of diversification.

The engine measures your portfolio across four independent dimensions. A book can score high on one and low on another — that combination is where the interesting analysis begins.

Positions

How many individual holdings. Beyond about 30 the benefit tapers; below 10 concentration risk dominates.

Sectors

How many distinct sectors are represented and how evenly weighted they are. Tech-only portfolios score low even with many positions.

Asset classes

Stocks, bonds, cash, alternatives. A single-asset-class portfolio is fragile no matter how many tickers it contains.

Geographies

Country exposure. Most retail investors are 90%+ home-country. The engine highlights this quietly.

What the engine looks for.

Better allocation

Highlights where you may be over or under exposed relative to your stated risk tolerance and time horizon.

Sector balance

Shows which sectors are missing and which sectors quietly dominate your book.

International tilt

Considers home-country bias and proposes ways to think about international diversification.

Asset class mix

Stocks, bonds, cash, alternatives — flags large gaps and explains what each class contributes.

Correlation lens

Ten "different" stocks that move together aren't diversified. The AI flags the pattern.

Educational, not automated

You always make the call. InvestmentLens explains, it does not execute.

How the diversification score is built.

score =  min(30, positions × 3)
       + min(30, sectors × 6)
       + min(20, asset_classes × 6)
       + min(20, countries × 5)
clamp(1, 100)

Diminishing returns are baked in. Position 4 counts as much as position 40 — beyond a point, adding names is noise, not signal. The score rewards breadth across dimensions, not obsessive granularity within one.

What "well diversified" looks like.

Score above 80

15+ positions, 6+ sectors, 3+ asset classes, 3+ countries. The book is genuinely broad. Individual mistakes hurt less; individual wins matter less. Most drawdowns will track the market.

Score 50 – 80

A tilted portfolio. Well-covered on some axes, thin on others. The AI will explain which axis to strengthen and why — for example, adding two more sectors often adds more diversification than adding ten more positions.

Score 25 – 50

Concentrated. Either intentionally (high conviction) or accidentally (own-industry bias, home-country bias). The AI will discuss which it looks like.

Score under 25

A very tightly focused portfolio. Fine if deliberate, dangerous if not. Expect the AI to flag it loudly and to walk through drawdown scenarios.

Understand the shape of your allocation.

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