Would you like to switch to our mobile app?

Sign in
Back to Login
Sectors, Industries, and the Business Cycle — Sector vs Industry
Font type: Sans-Serif
Font size: Large

Sector vs Industry

The words “sector” and “industry” may seem similar, but there are significant differences.

When it comes to investing, a “sector” refers to a specific segment of companies that operate in a specific section in the economy. An economy can be broken down into a number of sectors that can describe nearly all of the business activity in that economy. The U.S. stock market can be grouped into 11 different sectors as defined by the Standard & Poor’s.

Sectors can be broken down further into “industries”, which are groups of companies within each sector that engage in similar business activities.

Tap to watch our video overview of sectors and industries, and Tap Next to learn more about each of the 11 sectors.


If a company is part of the Energy Equipment industry, can it also be part of the Energy sector?

0/23 (0%) Correct
  • 1
    No, a sector is different from an industry.
  • 2
    No, the Energy Equipment is not part of the Energy sector.
  • 3
    Yes, the Energy sector is part of the Energy Equipment industry.
  • 4
    Yes, the Energy Equipment industry is part of the Energy sector.
Submit Answer
Next Page

Alex's thoughts: 
I like to diversify my portfolio in many different sectors as they are affected differently when the market is changing. This is to avoid putting all my eggs in one basket.