Spreading your money across enough different holdings that no single one decides your result. It is measured by how evenly your money is split, not by how many names you own: ten stocks with 91% of your money in one of them is barely more diversified than holding that one stock alone. Owning several companies in the same sector is a second, separate limit, because stocks in one industry tend to fall together. PSEye scores both on your portfolio page, as Diversification and Sector spread.
See every term in the full PSE investing glossary.