Portfolio Concentration Calculator
Enter up to 20 positive position or sleeve values in one consistent unit to calculate normalized shares, Herfindahl–Hirschman concentration, effective positions and top-share totals. The page adapts published sum-of-squared-shares arithmetic without importing antitrust thresholds as portfolio advice or claiming diversification quality.
Enter one concentration view
Use one pipe-separated row per holding or sleeve: label | positive absolute value.
Short label shared by every entered value.
One to 20 positive values. Combine duplicate economic exposures yourself when that is the intended view.
Entered share concentration
Entered Portfolio Exposure and Stress 1.0.0.
On smaller screens, scroll horizontally to inspect the complete calculation table.
| Holding or sleeve | Entered value | Normalized share | HHI contribution |
|---|
How portfolio concentration is calculated
HHI points = Sum of squared shares × 10,000
Effective positions = 1 ÷ Sum of squared shares
Version 1.0.0 adds all positive entered values and divides every row by that total. The normalized shares reconcile to 100% before any concentration statistic is reported.
The U.S. Department of Justice defines HHI as the sum of squared shares. This page applies that arithmetic to user-entered portfolio shares and presents the result on the familiar 0-to-10,000 scale.
Squaring gives larger shares more influence. One row containing the entire entered value produces 10,000 points, while many equal rows produce a lower value as their count increases.
Effective positions is the reciprocal of decimal HHI. Four equal rows produce four effective positions; uneven shares produce a value below the actual row count.
DOJ market thresholds serve antitrust analysis, not portfolio suitability. The page therefore reports arithmetic without moderately concentrated, highly concentrated, safe, excessive or recommended labels.
Worked example from the audited fixture
The audited fixture enters values of 60,000, 25,000, 10,000 and 5,000 USD for a total of 100,000 USD.
- The normalized shares are 60%, 25%, 10% and 5%. Their squared decimal shares sum to 0.435, so HHI is 4,350 points.
- Effective positions is 1 ÷ 0.435 = 2.2988505747. The largest entered share is 60% and the top three sum to 95%.
Reproduce it: select “Load audited example” above. The governed engine retains full precision and rounds only the visible interface.
How to interpret the result
- HHI increases when more entered value sits in fewer or more uneven rows. It decreases when the entered shares become more even.
- Effective positions translates the same concentration into the count of equal-sized rows that would produce that HHI.
- The largest and top-three shares expose dominance directly and can be easier to audit than one summary statistic.
- A low value does not prove diversification because many rows can share the same currency, factor, strategy or market regime.
- A high value does not automatically mean unsuitable risk; the calculation has no knowledge of objectives, liquidity, hedges or total wealth.
- Choose the row definition deliberately. Position-, symbol-, currency-, strategy- and account-level concentration answer different questions.
Assumptions and limits
- All values must use one consistent positive absolute unit. Signed values and offsets belong in a separate exposure calculation.
- Duplicate labels remain separate rows because the engine cannot infer whether they represent the same economic exposure.
- The model does not look through ETFs, funds, indices, baskets or multi-leg products.
- Correlation, covariance, volatility, leverage, liquidity, margin, tail loss and stop behavior are excluded.
- Effective positions does not mean independent positions and should not be compared with actual count as a quality grade.
- Legal HHI thresholds and merger presumptions are not portfolio thresholds and are deliberately omitted.
- No target allocation, rebalance amount, risk band, forecast, signal or recommendation is generated.
Currency exposure vs stress vs concentration
These calculations are complementary, not interchangeable. Currency exposure preserves native FX legs, stress testing applies entered same-unit shocks, concentration measures entered share unevenness and portfolio volatility uses covariance assumptions. None of them alone establishes suitability or future loss.
| Measure | Evidence entered | Question answered | Main boundary |
|---|---|---|---|
| Currency exposure | FX pair, direction, base units and reference price | Long, short and net native units by currency | No cross-currency total or hedge decision. |
| Portfolio stress | Same-unit directional exposure and entered shock | First-order scenario P/L and equity reconciliation | No probability, nonlinear repricing or complete stress program. |
| Portfolio concentration | Positive absolute values in one unit | HHI, effective positions and top shares | No covariance, look-through or diversification grade. |
| Portfolio volatility | Weights, volatilities and correlation matrix | Covariance-based dispersion | A separate assumptions-based risk model. |
Frequently asked questions
- It measures how evenly or unevenly the entered positive values are distributed using normalized shares, HHI, effective positions and top-share totals.
- Each entered value is divided by the total, the decimal shares are squared and summed, and the result is multiplied by 10,000.
- They are one divided by decimal HHI, equal to the number of equal-sized rows that would create the same entered share concentration.
- No. The model does not know whether rows share a currency, strategy, issuer, market factor or correlated risk.
- Those thresholds serve legal market-concentration analysis and are not portfolio suitability or diversification thresholds.
- Combine rows when they represent the same economic exposure for your chosen view; the calculator does not merge matching labels automatically.
- No. The measure excludes look-through holdings, covariance, volatility, leverage, liquidity, margin and tail loss.
- No. It creates no target allocation, concentration grade, risk band, forecast, signal or recommendation.
Sources and methodology
- U.S. Department of Justice — HHI — Official definition of HHI as the sum of squared shares and its 0-to-10,000 scale.
- FINRA — Concentration risk — Investor education describing how large portfolio shares can create concentration risk and why look-through matters.
The immutable implementation contract fixes row parsing, direction signs, normalization, invalid states, reconciliations and permanent exclusions so later copy or layout edits cannot silently change the arithmetic.
Continue the concentration review
Verify the position values and execution terms
Before using a position, exposure or scenario value, confirm the exact symbol, contract basis, account currency, conversion, spread, commission, financing and execution records for the broker entity and account involved. These browser calculations cannot certify that entered evidence is current or complete.
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