Portfolio Concentration Calculator: a practical guide
How much of my money depends on my biggest holding?
See how much of your entered portfolio depends on its largest stocks.
By VolatileShares · Example version 1 · Updated . Hypothetical inputs, not financial recommendations or live company data.
A worked example, in plain English
The idea in 10 seconds: A basket with one huge item still depends heavily on that item.
Many tickers can still hide one big concentration.
Different tickers can fall together. A lower weight alone does not prove diversification.
- Entered portfolio value
- $1,000.00
- Unique holdings
- 3
- Largest holding weight
- 50%
Walk me through the full calculation
Your entered holdings total $1,000.00 across 3 unique tickers. MSFT is the largest at 50%. Based only on position weights, this has the concentration of about 2.63 equally sized holdings.
For illustration, if MSFT fell 10% and everything else stayed unchanged, the total would fall by about 5%. This is not a forecast. Stocks can move together, so spreading money across tickers alone does not establish sector or risk diversification. Duplicate tickers are combined.
Inputs used for this example
These are the calculator's example defaults, not suggested amounts or rates. Market calculators initially display USD. Change currency in the toolbar without creating a personal profile. Under optional Location & display settings, choose an example country for its currency and available historical CPI. Review any example household size and rent assumption before explicitly applying local assumptions: matching unedited budget/inflation fields change, while edited or restored inputs are kept. Lifestyle budgets are fictional examples, not measured national averages. Local tax, pension and borrowing links are guidance, not personal calculations. Switching currency alone does not change percentages, ages or share counts.
- Your holdings: stock symbol, USD value
- MSFT, 500 GOOGL, 300 BBAI, 200
Work backwards from your goal
How large could my biggest holding be at this weight?
Try a weight limit for your biggest holding.
Choose Work backwards, enter your target and the few essential inputs, then choose Calculate my goal. The answer is checked with the same forward calculation and applied in one step. Example assumptions are disclosed under More options. Expand Calculation details & tools only if you want more detail. Impossible or out-of-range goals show an error instead of invented numbers. Long numbers display commas while editing; calculations and saved snapshots keep the original precision.
Resize only the current largest holding. Other holdings stay unchanged; this does not model a sale, tax or reinvestment.
Return to the interactive calculator above →How the calculation works
Weight = holding value / total value. HHI = sum(weight^2). Effective holdings = 1 / HHI. Duplicate tickers are combined.
What this cannot tell you
Positive long-holding values in USD only; use a consistent valuation date. Measures ticker concentration, not sector, currency or correlated risk. An effective-holdings count does not prove diversification. No portfolio data is imported; notebook saving is optional.
Changing an assumption changes the example, not the future. Verify source dates and actual product, tax and lending terms before relying on any result. These tools do not replace appropriately qualified advice.
One holding can steer the whole total
If one holding is 50% of a portfolio and falls 10%, the portfolio falls 5% if everything else stays unchanged. Other holdings can move at the same time, so counting tickers alone cannot establish diversification.
Illustrative arithmetic, not market evidence or a promise of returns.
Keep a useful starting point
In the interactive calculator, compare different assumptions or explicitly save a named snapshot to My browser notebook. Saving is optional and browser-only, not an account or cloud backup. Revisit it on the same browser profile; restoring never refreshes prices or assumptions.