How do changes in common stock price volatility affect portfolio diversification? - Personal Investment Management > Investm... How do changes in common stock price volatility affect portfolio diversification? - Personal Investment Management > Investment Asset Diversification Articles -- Reducing Your Portfolio Risk - Financial Articles, Company level price risk has risen significantly in recent years, and price movement correlations between individual stocks have declined. This means investors must hold significantly more stocks to achieve diversification. Furthermore, volatility tends to jump well above average at the bottom of market cycles. Investors should understand these peaks in volatility and not just focus on the average volatility across market cycles. in Public bookmarkswith affectchangesdiversificationpersonalportfoliopricestockvolatility