Diversification :
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Diversification = the combining of investments with others whose returns are independent of one another.
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Tends to increase the probability that the EV for the portfolio is close to the sum of the EVs of the individual investments, thereby reducing risk.
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In practice, most investments are not independent; they are affected by common factors, to some extent.
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Specific (unsystematic) risk = the risk of an investment arising from factors that are independent of other investment returns.
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Systematic risk = the risk that is common to most investments.