Diversification is a risk management strategy that involves investing in a range of stocks across different sectors, geographies, and market capitalizations. By spreading investments across different asset classes or securities, diversification can help to reduce the impact of market fluctuations on the portfolio. It can also assist in managing risk in a stock portfolio by minimizing the impact of any one stock or sector on the portfolio, thereby reducing the overall volatility of the portfolio. Additionally, diversification can help investors capitalize on market opportunities by identifying undervalued stocks and potential growth opportunities across different markets and industries. Overall, this is an effective strategy for managing risk in a stock portfolio and can help investors achieve their long-term investment goals.