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Suppose you would like to reduce the risk of your portfolio by adding some stocks to it. What is the best thing you can do
Suppose you would like to reduce the risk of your portfolio by adding some stocks to it. What is the best thing you can do to reduce risk?
1. Choose new stocks that are negatively correlated with stocks you already own.
2. Choose new stocks that are highly correlated with stocks you already own.
3. Choose new stocks that are uncorrelated with stocks you already own.
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