Answers are grounded in this paper and cite their sources.
This paper addresses the relationship between diversification strategy and systematic risk (beta). Beta values are examined for six diversification categories, and it is found that betas for unrelated diversifiers are significantly higher than those of other firms. Possible contributions to this difference, including market power, capital structure, and capital intensity are explored.
No takes yet. Share an insight, caveat, or question.
Montgomery et al. (1984) studied this question.
Synapse has enriched 10 related papers. Consider them for comparative context: