Unique Diversification Benefit

Unique Diversification Benefit

Reduction in the likelihood of financial distress for a conglomerate firm that comes with its diversified investments.

Unique Diversification Benefit

The reduction in the likelihood of financial difficulties that occurs when a person or company diversifies his/her/its investments. The downside to the unique diversification benefit, however, is the fact that it generally reduces the expected return.
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This property was very appealing due to its stellar real estate along with the unique diversification benefit of having retail and industrial uses.
Among those that may offer attractive risk and return profiles - as well as unique diversification benefits - are mortgage servicing rights (MSRs), non-performing loans (NPLs) in the residential mortgage market and synthetic residential mortgage-backed securities (RMBSs).