Portfolio-Fit Screen
The second-pass test on whether adding a position improves the portfolio relative to what is already owned -- accounting for sector concentration, correlation between positions, factor tilts, and total drawdown sensitivity. A name with strong per-name conviction can fail the portfolio-fit screen if it is highly correlated to existing positions; the right answer in that case is smaller size, paired hedge, or pass. The portfolio-fit screen is most valuable when it surfaces correlations the sector classification missed (REIT + homebuilder + regional bank all correlate through rates even though they sit in three different sector codes).
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Related terms
Adjusted Cost Basis · Annuity · Capital Gains Distribution · Capitalized Interest · Cost Basis · Dividend Discount Model (DDM)
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