Modern Portfolio Theory
A solid component of Free Market Portfolio Theory is Modern Portfolio Theory (MPT), which earned the Nobel Prize in Economics in 1990 for the collaborative work of Harry Markowitz, Merton Miller and William Sharpe.
Essentially, MPT demonstrates that for the same amount of risk, diversification can increase returns. The task is to find assets with an academically proven risk premium and low correlations.
Source: Malkiel, Burton. “A Random Walk Down Wall Street”. 1973
Fama, Eugene; French, Kenneth. “The Cross-Section of Expected Stock Returns”. Journal of Finance, 1992