Diversification is done across the main Asset Classes and by individual securities within an Asset Class.
Diversification is part of an overall Investment Strategy. In practice diversification involves both making investments across a broad group of Asset Classes and across a range of securities within an Asset Class. There are a number of objectives for doing this, covering both risk and return. For diversification to be effective, the level of correlation between the different asset classes must be low. Keep in mind, diversification will never eliminate risk.
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