HHI index
The sum of squared relative shares. A lower value indicates a more even allocation.
PORTFOLIO CONCENTRATION
Diversification calculator
Enter the amount held in each platform or position. The calculator shows relative shares, HHI, the effective number of positions and the influence of the largest exposure.
What does it measure?
The tool measures capital allocation. It does not assess solvency, regulation, loan quality or future returns.
The tool measures capital allocation. It does not assess solvency, regulation, loan quality or future returns.
Portfolio positions
Use one currency for all amounts. Names are optional. Positions with identical names are merged automatically.
Platform / positionInvested amount
HOW TO READ THE RESULT
Four different perspectives
Do not rely on a single indicator. Use them together to understand the structure.
Effective number of positions
Shows how many equally sized positions the current allocation approximately represents.
Largest share
Shows how strongly one position could affect the entire portfolio if a problem occurs.
Balance score
Compares the effective number with the actual number of positions. This is a visual reference, not a credit rating.
Number of platforms
The count alone is insufficient. Five platforms can still be highly concentrated if one holds most of the funds.
Hidden dependency
Different platforms may share the same group, country or loan originator. Review these dimensions as well.
Formula and example
wᵢ = amountᵢ / total
HHI = Σ(wᵢ²)
Effective number = 1 / HHI
HHI = Σ(wᵢ²)
Effective number = 1 / HHI
With four equal positions, each has a 25% share, HHI is 0.25 and the effective number is 4. If one position is significantly larger, HHI rises and the effective number falls.
Indicative thresholds: up to 0.15 — lower concentration; 0.15–0.25 — moderate; above 0.25 — high. The thresholds describe structure, not investment quality.