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Diversification in the Context of Corporate Finance

Diversification is supposed to reduce risks. What does diversification mean in the context of corporate finance, and how does it reduce risks in that context? Can all risks be reduced through diversification? Can a corporation have too much diversification?

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Diversification is supposed to reduce risks. What does diversification mean in the context of corporate finance, and how does it reduce risks in that context?
Diversification in the context of finance is risk management techniques. It means mixing a wide variety of investments so that investments are spread out to reduce risks. In the context of corporate finance, a company may spread its investments in a number of different types of instruments to reduce risks. On the other hand it means the firm invests its resources in different types of projects so that its risks are reduced. It also means ...

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