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Systemic Risk and Diversification Analysis

This chart tells us that the portfolio being analyzed has a variance 60% captured in only one dimension. Minimizing the percentage of the portfolio captured in the first dimension is a routine output of our investment process and greatly reduces the susceptibility of the portfolio to system risk. We see good portfolio (made of ETF’s Mutual Funds, Asset Allocations Policies) will shed their first dimension in the 10-15% range