Wetlands are typically shallow, wide and vegetated inland freshwater environments that are saturated for a large proportion of the year or all the time. There is usually limited or no movement of water in wetlands, i.e., the water is static. Wetlands are important habitat for a wide variety of plant and animal life, such as reeds, fish, waterfowl etc. Wetlands also mitigate floods and provide a buffer against droughts.
Estuaries are typically wide shallow areas at the outlets of rivers to the sea. They are therefore typically salt water environments. Estuaries can form because of the closing of a river mouth or because of siltation, causing a wide and shallow delta. Estuaries also provide an important habitat for mangroves, fish and birds.
The average covariance between securities will be much more important in determining a portfolio’s risk than the average variance, when the portfolio is “well diversified.”
