Assume each of the asset classes below has the following correlation to long$-$term government bonds:

Treasury bills: $\mathrm{.}67$

Corporate bonds: $\mathrm{.}81$

Large stocks: $\mathrm{.}37$

Small stocks: $\mathrm{.}12$

Which one of the following correctly states the impact of diversification on a portfolio of long$-$term government bonds?