Improvement of the existing procedure of asset diversification in the process of formation of the investment portfolio

Abstract

Purpose: to consider the existing approaches to diversifying the assets of the investment portfolio and to suggest ways to apply accounting ratios to the diversification procedure. Discussion: аn investment portfolio is a fundamental analysis tool. The investor has two goals. The first goal is to reduce the risks that the investor bears. The second goal is to obtain the expected return on the investment portfolio. The existing approaches to diversification fulfill all the assigned tasks, but can be improved by including mathematical indicators and methods in the diversification process. Results: the article explains the proposed approach to asset diversification through the additional use of numerical indicators.