Diversification is a question of weights, not line count — and this calculator measures the weights. It converts holdings and weights into an “effective number of holdings” (the number of equal-sized positions the portfolio behaves like), flags any single position above the common 10% guideline, and shows how much of the total sits in the top three names. Nothing leaves the browser.
Your holdings & weights
TICKER weight% — weights are normalised automatically. Nothing leaves your browser.Heuristics: effective holdings = 1 ÷ Σ(weight²) — how many equal-sized positions your concentration is equivalent to. The 10% single-position line is a common risk-management convention, not a rule. Treats each line as independent — ETFs count as one holding here (their look-through requires holdings data). Mathematical context only — not investment advice.
Runs 100% in your browser. Nothing is uploaded, ever.
How is diversification calculated here?
With the Herfindahl–Hirschman Index (HHI) — the concentration measure antitrust regulators apply to markets — applied to portfolio weights. Square each holding’s weight and add the squares: the result sits between 0 (infinitely spread) and 1 (everything in one position). Its reciprocal is the effective number of holdings, and it is the more honest figure: twenty positions where one is 60% of the portfolio behave like fewer than three equal-sized ones.[1]
The verdict bands on this page — diversified below 0.10, moderately concentrated to 0.18, concentrated above — are analytical conventions chosen for readability, not regulatory thresholds. The 10% single-position flag follows a widely used risk-management guideline, not a rule.[2][3]
What counts as a concentrated portfolio?
There is no official number — but investor-education sources and advisers cite the same ranges with minor variation. They are starting points for a decision, not instructions.
| Single position | How it is commonly read | Source of the convention |
|---|---|---|
| Under 5% | Conservative, well diversified | T. Rowe Price flags holdings above 5% as worth addressing, especially company stock[2] |
| 5–10% | Acceptable for a high-conviction position, monitored | Common adviser guideline; Fidelity’s education pages discuss why a large single holding deserves review[3] |
| 10–20% | Meaningful concentration; one company can dominate results | The 10% line is the most-cited convention; this calculator flags it |
| Over 20% | Single-company risk drives the portfolio | Widely described as over-concentration |
What this tool doesn’t do
It treats every line as independent — which is exactly what a portfolio is not. An S&P 500 fund counts as one holding here, although its ten largest companies make up a large share of the index and are very likely in the growth fund and the individual shares next to it. Seeing through funds to the companies inside them — look-through — requires holdings data this page does not have. That is a tracker’s job; Avex does it from exported statements. The calculator also ignores correlation, currency and sector: two different banks are two lines here, and one bet in reality.
The question behind these numbers — how much in one stock is too much — has its own guide: what the common thresholds say. What a concentrated position does when markets fall is the drawdown simulator‘s job.
Higher is more diversified — but there is no target. A portfolio of broad index funds scores far above its line count because weights are spread thinly inside each fund; a portfolio with one dominant stock scores low, however many lines it has. The figure is for comparing before and after a change, not for benchmarking.
No — each fund is one holding here. Overlap between funds, and between funds and the individual shares held alongside them, is exactly what this page cannot measure. A tracker with holdings data can; this calculator is the quick check before that.
Investor-education sources most often cite 5% as conservative and 10% as the line where a single company starts to dominate results; above 20% is widely described as over-concentration. These are conventions, not rules, and the right figure depends on the rest of your wealth and on whether the stock is also your employer.
For a true picture, yes: concentration is measured against total wealth, not one account. Vested employer shares, an ESPP and the company-stock fund inside a 401(k) are the same bet as the shares you hold in a brokerage account.
No — the calculation runs entirely in the browser, and nothing pasted here leaves the page. Avex itself works from statement files the user chooses to upload, not from broker logins.
Sources & references
- U.S. Department of Justice: Herfindahl–Hirschman Index (definition)
- T. Rowe Price: Actions you can take if your portfolio is too concentrated in one equity
- Fidelity Learning Center: Do you hold too much in one investment?
Last verified: 22 October 2026.