During periods of extreme market stress, what happens to the diversification benefits of a portfolio if the correlation between all asset classes shifts toward positive one?

Diversification is an investment strategy of spreading money across different types of assets, such as stocks, bonds, and commodities, to reduce risk. Under normal conditions, these assets often have low or negative correlations, meaning they do not all move in the same direction at the same time. Correlation is a statistical measure ranging from negative one to po....