Finance School of Management Further points on diversification Reduce chances of either big gains or losses Perfect correlation do not reduce risk Aggregate uncertainty: not reduced “ genius, dunce” and average” investors:Good luck or skill? uesTc35 Finance School of Management Further Points on Diversification ❖ Reduce chances of either big gains or losses ❖ Perfect correlation: do not reduce risk ❖ Aggregate uncertainty: not reduced ❖ “genius”, “dunce” and “average” investors: Good luck or skill?