Horizontal Diversification

Horizontal Diversification

In risk management, the act or strategy of adding more investments of like kind to one's portfolio to hedge against the investments already in it. Ideally, this reduces the risk inherent in any one investment, and increases the possibility of making a profit, or at least avoiding a loss. That is, horizontal diversification involves investing in similar instruments. Examples include investing in several technology companies or in different types of bonds. Horizontal diversification may be as broad or as narrow as the investor chooses. In general, broader diversification equates to less risk and lower return. See also: Markowitz Portfolio Theory, Vertical diversification.
References in periodicals archive ?
Each of the Gulf states has developed long-term strategies, using different combinations of vertical and horizontal diversification.
Successful strategies have relied on a policy mix of promoting vertical diversification in 'comparative advantage' sectors such as oil and gas and petrochemicals and endeavours into horizontal diversification beyond these sectors with an emphasis on technological upgrade and competition in international markets," the report said.
Successful strategies have relied on a policy mix of promoting vertical diversification in "comparative advantage" sectors such as oil and gas and petrochemicals and endeavours into horizontal diversification beyond these sectors with an emphasis on technological upgrade and competition in international markets," it said.
Contributors describe the dangers and the magnitude of the challenge of converging and connecting illicit networks; the ways and means used by transnational criminal networks and how illicit networks actually operate and interact; how the proliferation, convergence, and horizontal diversification of illicit networks challenge state sovereignty; and how different national and international organizations are fighting back.
Horizontal diversification takes place within the same sector by adding new products.
Nevertheless, we would consider horizontal diversification for Globaltrans at a reasonable price as a positive development, as it could be a good avenue for its accumulating cash pile.
Pavitt (1994) posits that horizontal diversification presents key opportunities for new product development, specially in large or R&D based organizations.
Further horizontal diversification opportunities in sectors such as banking and utilities are yet to be explored in the region, as the operators develop and test the delivery model of these services," added Vasiljev.
This paper attempts to investigate the rationale for diversifying Macao's economy, evaluate the prospects for vertical and horizontal diversification and draw out some policy implications.
This is especially the case as The9 continues to execute its strategy of horizontal diversification and vertical integration, which may extend the geographic reach of the Company's activities beyond China.
The process of de-conglomeration has been underway amid the trend of vertical integration a reversal of past trend of horizontal diversification.
The extensive vertical and horizontal diversification of hospitals into chains, physician-hospital organizations, and provider-sponsored HMOs arguably is evidence of free cash flows in a declining industry (inpatient acute care) rather than of efficiency-enhancing pursuit of operating synergies (Robinson 1999; Burns et al.

Full browser ?