C

Glossary · PSX term

Concentration risk.

Concentration risk is the danger of having too much exposure to a single stock, sector, or theme.

Definition

When a large share of your portfolio sits in one position, a bad outcome there can dominate your results. Spreading holdings reduces concentration risk but may also dilute strong convictions.

Worked example

Putting 60% of a portfolio in one bank stock creates heavy concentration risk if that bank stumbles.

Related on PSX Clarity

Diversification

Asset allocation

More glossary terms

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Capital gain tax

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Current ratio compares current assets with current liabilities. It gives a quick view of short-term liquidity, especially for working-capital-heavy businesses.

Cum-dividend means a share is trading with the right to the upcoming declared dividend still attached.

Circuit breaker

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Central Depository Company (CDC)

The CDC is the institution that holds PSX shares electronically and records who owns them.

CDC Investor Account

A CDC Investor Account holds your shares directly with the CDC rather than inside a broker's pooled account.

Cash-settled futures

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The coupon rate is the annual interest a bond pays, stated as a percentage of its face value.

Consumer Price Index (CPI)

The CPI measures the average change in prices of a basket of goods and services households buy.