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Conventional investment wisdom is to hold a diversified portfolio. Diversification is seen as the responsible approach to investment. To maximize the benefit of diversification, an
Conventional investment wisdom is to hold a diversified portfolio. Diversification is seen as the responsible approach to investment. To maximize the benefit of diversification, an investor must analyze the correlation. Explain the importance of portfolio diversification and why does portfolio diversification rely on correlation analysis. Use examples to explain your answer.
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