reduction in risk != rise in profit; it means safety, nothing more - nothing less.
Yes, even though it reduces the risk but it doesn't mean you can freely get the profit. Because, it just minimizes the risk like you said. It looks dumb when someone said that you can get profit without no risk, in reality that's really bullshit.
Correct, if you do things right you will be capable of reducing your risk by buying several different coins but somehow some people think that the only thing that they need to earn a huge amount of money is to just buy many coins and anyone that has tried that strategy in the past can tell you that it doesn't work, besides I'm not so sure how much diversification can help when most coins move in a way very similar to bitcoin.