A key and recurring theme in finance is the pervasive uncertainty surrounding the performance of almost every tradable asset, which can manifest itself as increased volatility in prices, interest rates, and exchange rates. This volatility naturally poses substantial risks to portfolios and financial positions, prompting the need for robust strategies to mitigate potential losses. One widely discussed approach is diversification, a tactic that implicitly offers a “free lunch,” as demonstrated in Chapter 1 , by dispersing individual asset risk across a wider set of holdings. However, diversification primarily shields against idiosyncratic or unsystematic risk, and when the entire market changes downward, it proves insufficient to protect portfolios from broad market declines.