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How to use correlation techniques to diversify your risk

Diversification is a process of minimizing risk and maximizing returns by investing in different asset classes.

Correlation is a statistical measure used to analyze the relationship between different asset classes in a portfolio.

Stocks help in providing drastic growth but also carry a significant risk of losing capital in the case of an internal or external financial crisis.

Debt instruments help protect the capital invested.

Gold is often bought when the stock market tends to fall in a disturbed economic situation.

A diversified portfolio for a moderate to low-risk profile investor is optimized when it includes stocks, debt, and gold.

A portfolio with less correlated instruments is more profitable.

A well-diversified portfolio helps to achieve financial goals without taking a risk.

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Portfolio diversification: How to use correlation techniques to diversify your risk

Correlation is a statistical technique that is simple to use in diversifying your portfolio. Let's understand how to use it in detail.

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Portfolio diversification: How to use correlation techniques to diversify your risk

Correlation is a statistical technique that is simple to use in diversifying your portfolio. Let's understand how to use it in detail.

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