Nobel-prize economist Harry Markowitz argued that diversification is the only free lunch in investing, which was our inspiration behind the title of this report.
But what did he mean by this? It’s a reference to a good diversification strategy’s primary benefit: the ability to increase return on investment without increasing your risks!
In this guide, you will learn:
- Why the ability to quantify diversification benefits is an investor’s newest ally through applying the Modern Portfolio Theory (MPT) in a renewables portfolio
- How correlations will reveal value in your portfolio you never knew existed
- Key steps to reach a portfolio view, including the necessary pre-work data
- Material lessons learned from a real-life case study comparing five portfolios across Europe
Our guide, curated particularly to address the needs of Independent Power Producers (IPPs) and clean energy funds, dives into the details of how to quantify your diversification benefits, which could mean saving millions in unnecessary hedges. Better from simply a free lunch, right?
A well diversified portfolio can lead to numerous benefits, and the renewables industry appears to know that, in theory. What is missing though, is the ability to discover the hidden value of diversification through developing a portfolio view.
Download our guide, and enjoy the deep dive!
By David Willemsen, Head of Risk Advisory, Cédric Piaget, Senior Risk Expert & Maritina Kanellakopoulou, Insights Analyst
