Best equity portfolio diversification will be achieved by including stocks withKlausimas 4AtsakymasHigh correlation of returnsLow correlation of returnsHigh correlation of pricesLow correlation of prices

Best equity portfolio diversification will be achieved by including stocks with Low correlation of returns.

Here's why:

1. Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. The rationale behind this technique is that a portfolio constructed of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.

2. Correlation is a statistical measure that expresses the extent to which two variables move in relation to each other. In the world of finance and investing, correlation usually refers to the degree to which the price of two securities move in relation to each other.

3. If two stocks have a high correlation, their prices tend to move in the same direction. If one stock goes up, the other is likely to go up as well. This is not ideal for diversification because if one stock goes down, the other is likely to go down as well, increasing the risk of your portfolio.

4. On the other hand, if two stocks have a low correlation, their prices do not necessarily move in the same direction. If one stock goes up, the other stock might not be affected, or it might even go down. This is ideal for diversification because it reduces the risk of your portfolio. If one stock goes down, the other might not be affected, or it might even go up, offsetting the loss.

5. Therefore, the best equity portfolio diversification will be achieved by including stocks with a low correlation of returns. This allows for the potential of higher returns and lower risk.