A practical approach to diversification of growth stocks and risk - profit

A financier who follows the changes in prices of growth stocks can minimize the risk by diversification. In this study, diversification of growth stocks ? the relation between risk and profit are analyzed.In this first part of the study, introduction about growth stocks is given. Price and value descriptions for growth stocks are given and agents that affect growth stocks are discussed.In the second part, diversification of growth stocks, risk and profit concept and types of risk are explained; risk is classified as systematic and unsystematic. The risk and profit of single investment are observed, then the risk and profit of investment are emphasized within portfolio.To associate the risk and profit within portfolio standard deviation, variance, variability coefficient, covariance, correlation ve beta coefficient terms are discussed.In the research part, the risk profits of growth stocks are calculated and relations bewteen them are observed using monthly profits of 28 growth stocks in IMKB 30 index. The profit of growth stocks in constituted porfolios are classified according to risk levels, it is also shown that unsystematic risk in porfolio can be decreased by diversification at positive and negative corelation levels.Keywords: Growth Stock, Risk, Growth Stock Risk and Profit, Evaluation of Portfolio Risk and Profit.