Utilizing the fact that values of two or more assets do not always move in the same direction at the same time in order to reduce the risk of a portfolio is called diversification.

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Diversification involves investing in assets that are not closely correlated with each other to spread out risk and reduce the overall volatility of a portfolio. This is based on the premise that different assets tend to perform differently under different market conditions, so by holding a variety of assets, a portfolio is less likely to suffer large losses from a single event or trend.

Utilizing the Fact That Values of Two or More Assets