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Strategies & Market Trends : Waiting for the big Kahuna

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To: Bilow who wrote (9208)11/6/1997 1:06:00 AM
From: kas1  Read Replies (1) of 94695
 
carl, a much easier (for me, anyway) explanation is that any index is already "diversified" for you. assuming no covariance among its constituents (bad assumption, but close enough to be workable), any movements in stock i should be cancelled out by movements in stocks i+1, i+2, etc.
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