Portfolios of Agricultural Market Advisory Services: How Much Diversification is Enough?

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dc.creatorCabrini, Silvina M.
dc.creatorStark, Brian G.
dc.creatorIrwin, Scott H.
dc.creatorGood, Darrel L.
dc.creatorMartines-Filho, Joao Gomes
dc.date2017-04-01T19:59:54Z
dc.date.accessioned2026-07-09T04:33:34Z
dc.descriptionThis study analyzes the potential risk-reduction gains from naïve diversification among market advisory services for corn and soybeans. The total possible decrease in risk through naïve diversification is small, mainly because advisory prices are highly correlated on average. Moreover, because marginal risk-reduction benefits decrease rapidly with size and the cost of holding the portfolios increases linearly due to services’ subscription fees, it is optimal to limit portfolio size to a few advisory programs. Based on certainty equivalent measures and two representative risk-aversion levels, preferred portfolio sizes are between one and three programs.
dc.identifierdoi:10.22004/ag.econ.43717
dc.identifierhttps://ageconsearch.umn.edu/record/43717/files/101-114.pdf
dc.identifierhttp://ageconsearch.umn.edu/record/43717
dc.identifier.urihttp://hdl.handle.net/123456789/551692
dc.languageeng
dc.publisher
dc.sourcehttp://ageconsearch.umn.edu/record/43717
dc.titlePortfolios of Agricultural Market Advisory Services: How Much Diversification is Enough?
dc.typeText

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