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Portfolio Diversification: Correlation and Risk Reduction

Jakub's avatar
Jakub
Jul 25, 2024
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Diversification is often described as the only "free lunch" in investing. It's a risk management technique that mixes a wide variety of investments within a portfolio to potentially reduce the overall risk of the portfolio.

Why Diversify?

The main idea behind diversification is that a portfolio constructed of different kinds of assets will, on average, yi…

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