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@article{198963,
        author = {Riya Surendra Singh},
        title = {A STUDY OF PORTFOLIO DIVERSIFICATION AS A TOOL FOR RISK REDUCTION},
        journal = {International Journal of Innovative Research in Technology},
        year = {2026},
        volume = {12},
        number = {11},
        pages = {10038-10042},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=198963},
        abstract = {Portfolio diversification is a fundamental risk management strategy that enables investors to minimize exposure to unsystematic risk by allocating investments across a range of financial assets. This study examines the effectiveness of diversification in reducing portfolio risk using selected Indian stocks across different sectors. By constructing diversified portfolios and comparing them with individual stock investments, the research evaluates the relationship between risk and return using statistical measures such as standard deviation and correlation.
The study relies on secondary data obtained from the Indian equity market and applies principles derived from modern portfolio theory to assess portfolio performance. The findings indicate that diversified portfolios exhibit significantly lower volatility compared to concentrated investments, thereby enhancing risk-adjusted returns. However, the degree of risk reduction depends on asset selection, correlation among securities, and sectoral allocation.
The research concludes that while diversification cannot eliminate systematic market risk, it serves as an effective tool for optimizing portfolio performance and ensuring stability in volatile market conditions. The study provides practical insights for investors, financial analysts, and academicians seeking to apply diversification strategies within the Indian stock market framework.},
        keywords = {Portfolio Diversification, Risk Reduction, Indian Stock Market, Portfolio Management, Modern Portfolio Theory},
        month = {April},
        }