Abstract
Investment is regarded in common stock as an important investment decisions, as of the wide trading size in these types of the financial assets issued by the corporations which are supposed to be the movements in the financial market as a reflection of the information that issued by the corporations. The present research attempts to study the effectiveness of diversification of in reducing the investment portfolio risk, covering the year 2009. It requires achieving the research objectives. Selection of 45 corporations registered in Amman Stock Exchange as a sample of the research and by 15 corporations for each of the insurance sector, the service sector, the industrial sector. The research conducted to the several conclusions: The effective diversification has a clear impact in reducing in the total and irregular portfolio risk equally in all sectors which formed three investment portfolio, as of the unsystematic risk that faced the corporations were equal with the total risk limitation .According to that the hypotheses of the research was confirmed. .
