Traditional finance reminds us that it's prudent to diversify our portfolios...that we should never put all of our eggs in one basket. It's good practice to split up our eggs across multiple baskets.

To examine this idea, the research team conducted a study that compared the risk/return profile of a few single stocks versus a portfolio that was evenly allocated across all those same stocks. What we see is that diversification does indeed leave us with a more balanced risk/return profile.