Diversifying an investment portfolio is a strategy that allows investors not only to limit exposure to losses in their portfolio, but also to have a stake in various markets, and this can result in higher profitability and lower risk. With a diversified portfolio, the risk of generalized loss of profitability is lower, as the loss will be diluted.
It is important to ensure that the correlation between these is low, as the goal is to minimize losses by diluting them, and maximize gains. The investment class needs to be diversified.