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Easy · portfolio_optimization · Quant Researcher interview question · herfindahl_index, portfolio_concentration, effective_positions, diversification, portfolio_optimization
The Herfindahl-Hirschman Index (HHI) is a standard measure of concentration used by portfolio risk managers to quantify diversification. Calculated as the sum of squared portfolio weights, its reciprocal provides the "effective number of positions" (N_eff), an intuitive metric for assessing how many equally-sized bets a portfolio represents. Task Implement the function herfindahl_concentration(weights: list) -> list to calculate portfolio concentration metrics. Given a list of portfolio weights