What is portfolio diversification and why is it necessary

p YEREVAN, 4 July. /ARKA/.nbsp; Risk is one of the factors that need to be taken into account at all stages of investment- from planning to performance evaluation. Properly identifying potential threats, maximising protection from them and preparing for possible consequences is an important and challenging task for all market participants. A common approach to the solution is diversification. /p p Portfolio risk is measured not by the volatility of individual assets, but by how their price changes are interrelated.