This study examines the hedging by diversifications for the analysis of gold, bond yield, and stock in case of Pakistan markets. This study utilizes secondary data, and collects first January, 2014 to fifteen November, 2018 from yahoo finance, invsting.com, and business recorder. The various tests are used, which are stationarity, normality, serial correlation tests, and ARCH effects test through LM ARCH test in the study. Moreover, in this study the MGARCH and Diagonal BEKK-GARCH family model are employ with Gauss method for estimating the optimal hedge ratios for the construct of six portfolios diversifications. Thus, we hedged the six portfolios of gold/bond yield, gold/stock, bond yield/gold, bond yield/stock, stock/gold, and stock/bond yield have designed. The results suggest that there are just one best portfolios, which is gold/stock in this study. Hence, investors and portfolio managers can achieve more benefits, when they hedge stock against gold. Although, they can also get benefits from hedge of gold/stock. There are also three hedged portfolios of (i) gold; bond, stock, (ii) Stock; gold, bond, and (iii) bond; gold, stock have designed in the study but the results investigate that there are no benefits from these portfolios, these are worthless. Finally, the empirical findings illustrate that gold and stock can be hedged and to reduce the portfolio risk in case of Pakistan markets in this study. Hence, our study delivers an important indication to the international, domestic investors, and portfolio managers in diversifications of portfolio and management of risk. Supervisor:- Dr. Saud Ahmad