Free Tool
Portfolio Concentration Checker
Enter your positions to compute your HHI concentration score, top-holding weight, and effective number of holdings. Spot single-stock risk before it becomes a problem.
| Ticker | Current value | % of portfolio | |
|---|---|---|---|
| $ | — | ||
| $ | — | ||
| $ | — |
Why concentration matters more than you think
Our own analysis of 52 real Infnits user portfolios found the median investor has 66% of their portfolio in a single holding. 62% have more than half their wealth in one stock. This is not unusual — it's the default retail pattern. And it carries specific risks that broad-index ETFs don't.
- Idiosyncratic (single-name) risk. A dividend cut at your largest holding can drop your income 30–50% overnight.
- Drawdown amplification.A concentrated portfolio can drop 40% while the S&P 500 drops 10%. This is what happened to many Enron, GE, AT&T, and WeWork holders.
- Rebalancing paralysis. If 75% of your portfolio is in one appreciated position, selling to rebalance triggers a massive tax bill. Concentration can become a prison.
How the HHI is computed
For each holding, the calculator computes its weight as a percentage of total portfolio value. It then squares that percentage and sums across all holdings.
Squaring is the key step: a 50% position contributes 2,500 to the score, while ten 5% positions contribute just 250 combined. HHI penalizes concentration exponentially.
How to read your HHI score
| HHI range | Interpretation | What it feels like |
|---|---|---|
| Under 1,000 | Well diversified | Equal-weighted 10+ stocks or broad ETF |
| 1,000–1,500 | Moderately diversified | 6–10 positions, top one around 15% |
| 1,500–2,500 | Moderately concentrated | Top position 25–35%, few tail holdings |
| 2,500–5,000 | Highly concentrated | Top position 40–60% — classic tech-employee pattern |
| Above 5,000 | Extremely concentrated | One stock dominates; single-name event is catastrophic |
Effective number of holdings
A second metric we compute is effective holdings = 10,000 / HHI. It converts your score into “how many equal-weighted stocks does this portfolio behave like?”
- A portfolio of 20 stocks with one at 60% weight has an effective holdings count near 2.0.
- A portfolio of 10 equal-weighted stocks has effective holdings of 10.0.
- A single-position portfolio has effective holdings of 1.0.
Effective holdings is often more intuitive than raw HHI — it tells you how many “real” independent bets you have, which is what matters for diversification.
How to use this checker
- Click Load sample portfolio to see a concentrated example.
- Enter your own positions — ticker and current dollar value.
- Review the HHI, top-1/3/5 weights, and effective holdings.
- If the verdict is “Highly” or “Extremely concentrated,” consider broadening via additional positions or a broad-market ETF.
Concentration checker — Frequently asked questions
- What is HHI?
- HHI (Herfindahl-Hirschman Index) is a concentration measure used by regulators and economists. For a portfolio, it sums the squared weight (in percent) of every holding. A perfectly equal 10-stock portfolio has HHI of 1,000; a single-stock portfolio has HHI of 10,000. It captures both "how many holdings" and "how evenly weighted" in a single number.
- What is a good HHI for a portfolio?
- Under 1,000 is well-diversified (roughly 10+ equal-weighted positions). 1,000–1,500 is moderately diversified. 1,500–2,500 is noticeably concentrated. Above 2,500 indicates top holdings dominate the portfolio and a single bad event can cause outsized damage.
- What is "effective number of holdings"?
- Effective holdings = 10,000 / HHI. It converts your concentration score into an equivalent number of equal-weighted positions. A portfolio with HHI of 2,500 has an effective holdings count of 4.0 — meaning its risk profile is similar to holding 4 equally-weighted stocks, even if you technically own 20.
- Should I use ETFs or individual stocks to reduce concentration?
- Both work. A broad ETF like VOO counts as a single position in this calculator (because it is a single ticker), but internally holds 500 companies — which massively reduces effective concentration. For dividend-focused diversification without individual stock picking, SCHD, VYM, DGRO, and NOBL each hold 100+ stocks.
- Does this checker work for mutual funds and ETFs?
- Yes — at the ticker level. It treats each fund as a single position, not looking through to its underlying holdings. For look-through concentration analysis (crucial for investors with overlapping ETFs), the Infnits app computes effective sector and single-name exposure across all your holdings.