We know that investors should not keep all their eggs in one basket. Instead, they should ensure that the portfolio is properly diversified. The rationale behind this goes a little deeper than just keeping the eggs in different baskets. Let us scratch the surface.
We invest in various asset categories like equity, debt, gold, real estate, and commodities. The major ones, in terms of awareness and popularity, are equity and debt. The essence of diversification is that the correlation between various asset classes, be it equity, debt, gold, etc., is negative.
