Recently I was reading about project finance and portfolio risk assessment. The latter is largely dependent on concentration and correlation. S omeone won a Nobel prize for figuring out not to put all your eggs in one basket. Portfolio diversification is the idea of putting your money in different pockets. The more pockets, the better.
Concentration is a measure of diversity - the higher the concentration, the lower the diversity.
The greater the diversity, the lower the risk. The less related, the less correlated. Correlation varies from negative one to positive one. Zero correlation means completely random - no correlation at all. I could apply these concepts to the management of my own finances.