Redundancy analysis (or overlapping) detects, identifies, and alerts you about your hidden concentration risk and the efficiency of the capital deployed.
Through your direct holdings and your ETFs, you can end up having multiple exposures to certain stocks.
For example, if you hold Apple shares directly and also invest in a World ETF and a Nasdaq ETF, you’ve actually invested in Apple three times.
This feature is precisely the one that tells you about this and calculates your total exposure for every redundant asset (in € and %). Then, we consolidate all the results to determine redundancy rates at the overall portfolio and wealth level.
This calculation requires breaking down all the underlying assets of your possible ETFs, weighting these holdings, and then recombining them with your direct stock positions, if you have any.
This rate measures the share of your capital that contributes to redundancy and shows your level of financial risk.
Let’s take an example.
You own €500 of Apple shares directly
You have a €5,000 position in an S&P 500 ETF
The value of your portfolio is €5,500
Since Apple is 6.7% of the S&P 500, your ETF gives you €335 exposure to Apple.
We consider that the biggest source of exposure isn't redundant (the €500 held directly) and that only the extra investment counts for redundancy (the €335 via the ETF).
So you have €335 that is invested twice. Then we calculate the redundancy rate for each asset compared to the total value of the portfolio: (335 × 100) / 5,500 = 6%.
So 6% of your portfolio is invested twice.
The higher this rate is, the more the market moves on your assets will get amplified in your portfolio, both up and down.
Let's go a bit further.
Let's take the same portfolio example but add a €2,000 position in a Nasdaq 100 ETF.
The value of your portfolio is now €7,500. And you have three exposures to Apple:
€500 in direct holdings
€335 via the S&P500 ETF
€165 via the Nasdaq ETF (Apple makes up 8.25% of the ETF)
The overlapping value in Apple is 335 + 165 = €500.
This time, the redundancy rate by value relative to the total portfolio value: (500 × 100) / 7,500 = 6.66%.
As you can see, your financial risk has slightly increased.
This rate measures how diversified your holdings are and how complex your portfolio is. It simply counts the number of unique assets that appear in more than one place in your portfolio.
This rate is simpler than the previous one because it doesn’t take into account the values and weights of your holdings, just the names.
Let’s take an example.
You directly hold Apple and Microsoft stocks
You also have a Nasdaq 100 ETF.
Altogether, you're exposed to 100 companies. But there are 2 that are duplicates (Apple and Microsoft also in the Nasdaq 100 ETF).
So your redundancy rate per asset will be 2%.
Let's go a little further.
You have an S&P 500 ETF
You also have a World ETF
Altogether, you're exposed to 1,500 different companies. But since all the S&P 500 companies are in the World ETF, that means 500 companies are duplicated.
In this case, your redundancy rate per asset will be (500 × 100) / 1,500 = 33.33%.
The higher this rate is, the more complex and inefficient your allocation is.
The analysis comes with a summary table that shows you the details of your most redundant assets. For example:
The number of exposures
Total exposure to an asset (in % and in value)
Sources of exposure
