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Explain the link between covariance, correlation, and diversification in portfolio theory. Why does Buffett suggest that diversification is the only free lunch? Why, in sum,

Explain the link between covariance, correlation, and diversification in portfolio theory. Why does Buffett suggest that diversification is the only free lunch? Why, in sum, is correlation so important in the discussion of diversification? In the end, what is the goal of diversification?

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