Finance Diversification

Diversification

After looking at the cyclical nature of the communications equipment industry, it was clear that a company from an established industry was needed to diversify the wild swings in ANDW’s stock price. A 3 year regression of ANDW stock performance revealed a beta of 1.89. This high beta signifies that ANDW is almost two times as volatile as the general market. A company with a much tamer beta is required to balance a portfolio of ANDW stock. After a thorough sector and industry analysis, Fresh Delmonte Products (FDP) was found to be a stable company in the Crops industry under the Consumer Non-Cyclical sector. FDP is a large produ...