A theoretically ideal way to eliminate market risk is to diversify into the stocks of companies that make products investors buy when the stock market is depressed.

Diversifying into the stocks of companies that make products investors buy during a market downturn can help mitigate the impact of market risk on a portfolio. This is because even if the market as a whole is down, these companies may experience increased demand for their products and therefore may still see growth in their stock prices. However, it is important to note that diversification cannot completely eliminate market risk.