1.6.15 Effective number of TICCS®

We compute this metric for the following TICCS® pillars: business model, industrial (super)class, region/country, and corporate structure. For a given TICCS® pillar, these numbers give an idea of the concentration of each category. This computation is similar to the effective number of constituents except that the Herfindahl-Hirschman Index (HHI) is computed from the weights of each TICCS® category instead of the weight of a constituent.

For a given TICCS® pillar (e.g. business model), the weight of a TICCS® category within it (e.g., contracted) is computed as:

where:

is the weight of asset i.

n is the number of constituents in that TICCS® category.