Diversification
Diversification means spreading exposure across assets, markets or strategies rather than relying on a single source of returns. It can reduce concentration risk when exposures behave differently, but cannot eliminate losses, and relationships may become more closely aligned during market stress.
In a hypothetical portfolio, one holding gains $100 while another loses $70, leaving a $30 net gain before costs. Both holdings could instead lose together.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure