Final answer:
A portfolio reduces risk through diversification when its investments do not move in tandem. This mitigates the risk of having all investments lose value simultaneously.
Step-by-step explanation:
The question asks about the risk reduction strategy in portfolio management. A portfolio can reduce risk when its A) investments do not move in tandem. When the investments in a portfolio don't move in tandem, it means that they are diversified, and the performance of one investment is unlikely to be affected by the performance of another. This diversification is key to reducing risk because it mitigates the impact of any single investment's poor performance. On the other hand, if investments move in tandem (meaning they correlate highly with each other), the portfolio risk increases because it is more likely that all investments could lose value at the same time.