Correlation Risk: When 'Diversified' Isn't
Owning 15 different stocks doesn't automatically mean you're spreading out your risk.
Correlation risk is what happens when a portfolio LOOKS diversified by ticker count but is actually concentrated by what actually moves those stocks - ten different chipmakers, for example, mostly rise and fall together on the same semiconductor-sector news.
Real diversification means spreading across positions that respond to DIFFERENT underlying drivers - sector, geography, company size, even trading horizon - not just accumulating more tickers.
This is a genuinely easy trap to fall into precisely because it doesn't feel risky - a 15-stock portfolio feels safer than a 3-stock one, even when the underlying exposure is nearly identical.
Look at your own Watchlist again (you checked sector spread back in Foundations) - this time specifically ask which of your names would likely move together on the SAME piece of news.
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