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This classroom is an educational publication, not advice. Study tools, labs, and paper results stay hypothetical. Read the disclaimer.
Foundation
Lesson 14 of 22 · 14 min
Diversification: why one name is not a plan
The classroom book holds eight positions and behaves like fewer than two. This lesson does the arithmetic that shows why, and retires the number that hid it.
What you will be able to do
After this lesson you can explain why 1/HHI is exactly the effective-bets number computed under the assumption that nothing moves together, compute how far the real answer falls once correlation is included, and describe what diversification changes and what it cannot.
Inside this lesson
Count sleeves, not just tickers
What the number was really answering
Overlap is a silent concentrator
What diversification cannot do
This lesson is on Scholar
Audit includes orientation and the two-rooms lesson. The rest of the path is paid course access — still education, still not advice.