Sector

Classification systems assign every listed company to one sector, and to a narrower industry beneath it, so that thousands of companies can be discussed in about a dozen buckets. The screener in this product filters on those labels, and the sector shown at the top of a company page comes from the same source.

The labels are approximations, and the largest companies are where they strain hardest. A business selling software, advertising, physical devices and cloud services still gets filed under one sector, and which one is a judgment call that different providers make differently. Two data sources can put the same company in two places and both can defend it.

Sectors matter because companies inside one tend to move together. A rule change, a commodity price, or a shift in interest rates hits an entire industry at once, which is why holding ten companies from the same sector spreads a portfolio across ten names and roughly one exposure.