How-to: Company Pages
How to: Discovery
How-to: Portfolio Holdings
How to: Activity
How to: Leaderboard
How to: Performance
How to: Challenges
How to Trade
What are some basic Financial Vocabulary?
How to get recruited using EquitySim
Fixing Account Errors
My Trade is not being processed
An investment in my portfolio is showing up as $0
Stock splits, mergers + acquisitions
I can't find a specific investment
I can't sign-up
My credit card is being declined
What is a Stock?
How to Choose a Stock
Active Trading vs Portfolio Management
How to start testing multiple strategies
What is Portfolio Management Strategy?
How to Build a Basic ETF Portfolio
What is an ETF?
How to Choose ETFs
What is a Bond?
What is an Option?
What are Trading Strategies?
What is short selling?
Understanding Metrics / Data
What is Diversification?
What is the Diversification Score?
What are asset-classes?
What is Geopolitical Exposure?
What is Industry Diversification?
What is Geographical Diversification?
What is Industry Exposure?
How do I read the Diversification Radar Chart?
How to read impact on diversification
What is a good Sharpe Ratio?
What is Sharpe Ratio?
What are average excess returns?
How to Improve Sharpe Ratio
How do I measure risk?
What is Return?
What is Volatility?
Credit-Suisse Investment Challenge
Recording your Strategies and Rationales
Showcasing your work on EquitySim
Adding structure to your interview answers
Preparing for the interview
Preparing for the Sales + Trading Interview
Credit-Suisse: 2019 Case Study
2019 Credit Suisse Investment Challenge [Fall]
2020 Credit Suisse Investment Challenge [Fall]
2020 Credit Suisse Investment Challenge [Summer]
Host your own EquitySim Challenge
Can users share an account?
How do I export classroom data?
How do I delete, archive and edit my class?
Challenge Setting Types
How does EquitySim compare to other simulations?
What is EquitySim?
Can I undo a trade?
How are prices determined in the simulation?
Why didn't my trade execute immediately?
How do I exchange currency?
Why isn't my ranking showing up?
What are Public Portfolios?
How do I switch between portfolios?
How am I Graded?
Does EquitySim have sample assignments for my curriculum?
How are Options priced in the simulation?
How do I find my daily portfolio change?
How do the Portfolio Emails Work?
Is my data confidential?
How do I delete my account?
How our simulations reflect the real-world
What can I trade on EquitySim?
What is a good rationale?
How to set-up your team
What are the different order types?
Which government bonds can I trade?
When it comes to investing you are always looking for the investment that can provide you the best return for the lowest risk.
Portfolio Theorists designed mathematical proofs that demonstrate that you can achieve better risk/return ratios when combining more than one investment together. Generally, they saw that the more dissimilar the combined investments were, the greater the boost in their combined risk/return profile.
Combining a set of investments that are dissimilar is called Diversification.
Intuitively, diversification refers to "don't put all your eggs in one basket." If something bad happens that has a negative effect on one of your investments, holding other investments that are very dissimilar make it is less likely to also negatively affect those investments.
Is there a limit to diversification?
Imagine you were able to invest in every single investment available in the world. Would you be able to generate a profit? If one investment profited would another incur a loss?
Some professionals hold thousands of investments in their portfolios. Ray Dalio is a good example of a professional who fully endorses the principle of diversification.
Other professionals like Charlie Munger (Warren Buffet's partner) preach: "True professionals should be able to choose the best investments, being too diversified is a sign of being unskilled."
Regardless of where you land on the professional spectrum, everyone diversifies to some degree. The question is more how much.
How do I improve my diversification?
While there are many ways to slice investments in terms of similarity the elements we focus on at EquitySim are: Asset-Class Type, Country, and Industry. Our Diversification Score measures how you are spreading your portfolio across these areas.
Find your score under the "Performance Tab":
We require that you showcase an understanding of basic Portfolio Management as a starting point for recruitment opportunities.
To qualify for recruitment opportunities, you must hold at least one portfolio with a Diversification score of 80+.
We challenge you to try building a diversified portfolio!
For additional learnings, check out these articles:
How to build a basic portfolio