Both modern portfolio theory and traditional portfolio management result in diversified portfolios, but they take different approaches to diversification.

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Modern portfolio theory focuses on mathematical frameworks to optimize the balance of risk and return across a portfolio, often using statistical measures like variance and covariance of asset returns. Traditional portfolio management may also aim for diversification but might rely more on qualitative assessments and sector or asset class allocation based on experience and economic outlook rather than on mathematical optimization.

Both Modern Portfolio Theory and Traditional Portfolio Management Result in Diversified