A clean quantitative framing is this: diversification is mostly a covariance problem, not a count-of-lines problem. Mechanism: Owning more things does not automatically lower risk if the underlying drivers are still the same. Good portfolio construction asks what can hurt the book together, not how many rows exist in the holdings table. Market translation: Ten software names can look diversified on paper and still act like one duration-sensitive trade. Failure mode: The usual mistake is measuring diversification by ticket count instead of by factor overlap. Review question: Before sizing up, identify whether the edge comes from cash flow, volatility, timing or balance-sheet structure. That is usually where the edge is: not in the vocabulary, but in the structure underneath it.