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Portfolio Diversification refers to the practice of allocating assets in a portfolio across various investment types, industries, and geographical regions to minimize risk and maximize returns. In Financial Risk Management, diversification is used to spread out exposure to any one type of financial risk, reducing the impact of potential losses from individual investments. In the context of Business and Financial Management, diversification can help a company achieve long-term growth by spreading its investments across different areas of the market. This strategy can also be applied in Deal Negotiations, where a negotiator may consider diversifying their portfolio of assets to reduce dependence on any one deal or investment. By reducing exposure to specific risks and increasing the overall resilience of the portfolio, Portfolio Diversification plays a critical role in Financial Risk Management. It enables organizations to manage financial risks more effectively, protect their investments, and achieve their long-term financial goals.