Evening Straws , diversification for me is more about having exposure to a few sectors in which companies offer :

1. superior growth rates in revenue within their sector abd when comapred ot the broader market,
2. low levels of debt
3. are in sectors growing at superior rates compared to the market broadly.
4. Management have Skin in the game fand
5. history of prudent use of capital is key
6. Reasonaby priced campred to sector and market

In respect to large cap v small or medium . Small to medium is the preference in seekign market beating returns.

I am sure there a few more elements to factor when building a portfolio. 

From there simply ride the thesis and allow compounding t do its thing