Concentration

Concentration is what diversification isn't. A concentrated portfolio has most of its value in a handful of holdings — sometimes deliberately (high conviction), sometimes accidentally (one position has outgrown the others). Either way, the portfolio's fate depends more on the performance of those holdings than on the market average.

The risk side of concentration is idiosyncratic: a single earnings miss, fraud, regulatory shock, or product failure can move the portfolio by more than its market-wide component would. The return side is symmetric — a concentrated winner returns more than a diluted one.

allocate's portfolio X-ray surfaces concentration along three axes: single-name (a ticker's share of total), sector (a GICS sector's share), and region (home-country vs. US vs. rest-of-world). A portfolio that looks diversified by ticker can still be 70% Canadian financials by sector.