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Sector Exposure Calculator

Calculate portfolio sector allocation and concentration risk from position weights and sector classifications.

Sector Exposure Calculator

Calculate portfolio sector allocation and concentration risk from position weights and sector classifications.

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Guide

Understanding sector exposure and concentration risk

Enter positions as CSV with Name, Weight%, and Sector. Weights can be percentages (25) or decimals (0.25).
Sector exposure shows how your portfolio is allocated across economic sectors (Technology, Financials, Healthcare, etc.).
High concentration in one sector (e.g., >40%) increases sector-specific risk and reduces diversification benefits.
Monitor sector weights regularly and rebalance if concentration exceeds your risk tolerance or policy limits.
Consider sector correlations—some sectors move together during market cycles, reducing effective diversification.

Frequently Asked Questions

Sector exposure, concentration risk, and portfolio diversification

What is sector exposure?

Sector exposure measures how much of your portfolio is allocated to different economic sectors (Technology, Financials, Energy, Healthcare, etc.).

Why does sector concentration matter?

High concentration in one sector increases vulnerability to sector-specific risks, economic cycles, and regulatory changes, reducing diversification benefits.

What is an acceptable sector concentration?

It depends on your risk tolerance. Generally, no single sector should exceed 25–30% of the portfolio. For institutional portfolios, policy limits are often stricter.

How do I reduce sector concentration?

Rebalance by reducing positions in overweight sectors and increasing exposure to underweight sectors. Consider sector ETFs for efficient rebalancing.

Should I weight sectors equally?

Not necessarily. Equal weighting may not align with market capitalization or your investment views. Consider market weights or strategic tilts based on your outlook.

How often should I check sector exposure?

Review quarterly or when significant market movements occur. Sector weights drift as individual positions appreciate or depreciate at different rates.

What about sub-sectors or industries?

Sector-level analysis is a starting point. For deeper analysis, consider industry-level exposure (e.g., Software vs. Hardware within Technology).

Can sector exposure change over time?

Yes. Sector classifications can change, and portfolio drift occurs naturally as positions appreciate/depreciate at different rates without rebalancing.

How does sector exposure relate to style factors?

Sectors can have different factor exposures (value, growth, size). High sector concentration may also imply factor concentration, amplifying risk.

What sectors are most correlated?

Financials and Real Estate are often correlated. Technology and Consumer Discretionary can move together. Utilities and Consumer Staples are typically defensive sectors with lower correlation to growth sectors.

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Sector Exposure Calculator

Calculate portfolio sector allocation and concentration risk from position weights and sector classifications.

How to use Sector Exposure Calculator

Step-by-step guide to using the Sector Exposure Calculator:

Enter your values. Input the required values in the calculator form
Calculate. The calculator will automatically compute and display your results
Review results. Review the calculated results and any additional information provided

Frequently asked questions

How do I use the Sector Exposure Calculator?

Simply enter your values in the input fields and the calculator will automatically compute the results. The Sector Exposure Calculator is designed to be user-friendly and provide instant calculations.

Is the Sector Exposure Calculator free to use?

Yes, the Sector Exposure Calculator is completely free to use. No registration or payment is required.

Can I use this calculator on mobile devices?

Yes, the Sector Exposure Calculator is fully responsive and works perfectly on mobile phones, tablets, and desktop computers.

Are the results from Sector Exposure Calculator accurate?

Yes, our calculators use standard formulas and are regularly tested for accuracy. However, results should be used for informational purposes and not as a substitute for professional advice.