Exploring Portfolio Diversification for Investments for Reducing Risk and Maximizing Returns

Nikhil Jarunde

Abstract: This paper delves into the realm of portfolio diversification, a cornerstone strategy for mitigating risk and maximizing returns in the investment landscape. Through thorough exploration, it examines the theoretical underpinnings of diversification, its various approaches across different asset classes, and its effectiveness in navigating the complexities of the financial market. The paper then analyzes the potential trade - offs between risk reduction and return optimization, guiding readers towards a nuanced understanding of diversification's role within a broader investment framework. Ultimately, it aims to equip individuals with the knowledge and tools to construct diversified portfolios that align with their individual risk tolerance and financial goals.

Keywords: Portfolio Diversification, Investment, Risk