Explain they minimize the risk of the that portfolio

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When portfolio with asset W class and M are put together, they minimize the risk of the that portfolio because their risk move in opposite directions but they cannot eliminate the risk completely because there are many other factors out there that can affect both assets and bring them down. For example, if asset "A" is less riskier than asset "B", both of them can be combine together in a portfolio and since one is riskier than the other, they may move in opposite direction with respect to gains or loss and that can help neutralize, hence stabilize the portfolio from risk.

Can you give me an example of such a portfolio?

Reference no: EM1356757

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