Select a company with a reasonably wide portfolio of activities. Such companies do not always give segmental earnings figures, but they usually divulge sales figures for their component activities. By looking at the annual reports for three or four years, you can obtain a series of annual sales figures for each activity.

Assess the degree of past volatility of the sales of each sub-unit and their degree of inter-correlation. Also, see whether you can assess the extent of the correlation between each segment and the overall enterprise. How well diversified does your selected company appear to be? What qualifications should you make in your analysis?