DATA: Robinhood users are really bad at portfolio diversification
1Reported today on TheNextWeb
For the full article visit: https://thenextweb.com/insider/2019/12/04/data-robinhood-users-are-really-bad-at-portfolio-diversification/
DATA: Robinhood users are really bad at portfolio diversification
Can Robinhood users actually call themselves Robin Hoods, or is it just another tool for the rich to rob the average Joe? In this series we're diving deep into Robinhood's public data to uncover insights on its users' activity. Welcome to part two, where we'll combine Robinhood's data with other public sources to quantify the level of risk Robinhood users are taking, specifically in relation to how well (or poorly) diversified their portfolios seem to be.
At the start of November, we downloaded the full Robintrack database, which records how many Robinhood users hold a particular stock over time. While the public data doesn't contain total share-buying volumes, it still provides us with a wealth of information - even more so when combined with other readily available data about these publicly listed companies.
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To assess the amount of risk undertaken on Robinhood's platform as a whole, we have to look at how well diversified the holdings are. Now, diversification comes in many forms, so we're going to look at several of them:
Diversification across multiple s