StockPortfolioTools

Position Concentration Calculator

Measure how concentrated a portfolio really is: weights, the top three, a concentration index and the effective number of holdings.

Last reviewed

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Free · No sign-up · Runs in your browser

Counting positions is not measuring diversification. A portfolio of twenty holdings where one is half the value behaves, in practice, like a portfolio of three or four - and the count on the statement gives no hint of that.

This measures it properly. Enter each holding with its value and it produces the individual weights, the share held by the top three, a concentration index, and the effective number of holdings that index implies.

Your numbers

Results update as you type. Nothing is sent anywhere.

One per line: name, value.

Result

Effective number of holdings

3.2

Actual holdings
10
Largest holding
AAA
Largest weight
53.2%
Top three combined
68.92%
Smallest weight
2.54%
Weight if evenly spread
10%
Concentration index
3,105
Positions over the limit
1
Value above the limit
$71,460
Portfolio value
$165,400

This tool is for informational and educational purposes only. It is not financial or investment advice, and past performance does not guarantee future results.

Effective holdings is what the concentration index implies: a portfolio of twenty positions where one is half the value behaves more like a portfolio of three or four.

Counting positions is not measuring diversification. Holdings that move together concentrate risk regardless of how many lines the account shows.

The position limit is whatever you set. There is no correct figure here, and this tool does not suggest one.

Holdings by weight

HoldingValueWeightOver limit
AAA$88,00053.2%Yes
BBB$14,0008.46%No
CCC$12,0007.26%No
DDD$11,0006.65%No
EEE$9,5005.74%No
FFF$8,0004.84%No
GGG$7,2004.35%No
HHH$6,4003.87%No
III$5,1003.08%No
JJJ$4,2002.54%No

How to use the position concentration calculator

  1. Add one line per holding: name, then value.
  2. Set the maximum position weight you are willing to hold.
  3. Read the effective number of holdings rather than the actual count.
  4. Check which positions exceed the limit and by how much.

What people use this for

  • Checking whether a portfolio is as diversified as the number of holdings suggests.
  • Finding positions that have grown beyond an intended limit.
  • Comparing concentration before and after a rebalance.
  • Setting and enforcing a maximum position weight.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

A portfolio dominated by one position

Ten holdings, one of which has run a long way.

Effective number of holdings
3.2
Largest weight
53.2%
Positions over the limit
1

A more evenly weighted portfolio

The same number of holdings, spread far more evenly.

Effective number of holdings
9.9
Largest weight
11.66%
Top three combined
33.44%

The effective number of holdings

The concentration index squares each weight and adds them, which gives heavily weighted positions far more influence than small ones. Inverting it produces the effective number of holdings: how many equally weighted positions would produce the same concentration.

A portfolio of twenty names with an effective count of four is not diversified across twenty things. It is a concentrated position with nineteen smaller ones attached.

Weights are only half the picture

Two holdings in the same sector, tracking the same index, or exposed to the same single factor are not independent regardless of how evenly weighted they are. Concentration by weight is measurable from values alone; concentration by exposure is not.

This tool measures the first and cannot see the second. Treat a good concentration figure as necessary rather than sufficient.

Concentration arrives without a decision

Nobody chooses to hold forty percent in one position. It happens because that position performed, which is the same reason it is uncomfortable to trim.

Setting a maximum weight in advance and checking against it periodically is what converts that drift back into a decision, which is the entire purpose of the limit input here.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

  • Results are arithmetic on the numbers you enter. Nothing here predicts prices or connects to an exchange, broker or market data feed.
  • Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This tool is for informational and educational purposes only and does not constitute financial or investment advice. Past performance does not guarantee future results.

Nothing on this website is a recommendation to buy, sell or hold any security, currency, derivative or digital asset. No price is predicted and no return is promised or implied.

Trading and investing carry the risk of substantial loss, including the loss of your entire capital. Leveraged products can produce losses that exceed your deposit. Tax treatment depends on your jurisdiction and your circumstances.

Frequently asked questions

What maximum position weight should I use?

This site does not suggest one. The limit is whatever you set, and the tool reports which holdings exceed it and by how much.

What is a good effective number of holdings?

There is no threshold this site will invent. What is useful is comparing it against the actual count - a large gap indicates concentration that the count conceals.

Does this account for correlated holdings?

No. It measures concentration by weight. Holdings that move together concentrate risk in a way no value-based calculation can detect.

Is my portfolio data stored?

No. Everything runs in your browser and nothing you enter is transmitted or saved.

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