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Could you please tell me what the native-like option for this case is:

He diversifies his stock portfolio

OR

He varies his stock portfolio.

I am talking about the stock market (finance).

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Probably the former.

We generally say something varies if it changes over time. Diversifying a stock portfolio means investing it so that multiple securities with different risk profiles are held at the same time.

So

He diversifies his stock portfolio

means the portfolio contains a diversity of risks at any single moment, but doesn't say anything about whether this diverse portfolio ever needs adjustment, whereas

He varies his stock portfolio

means that he changes the contents of the portfolio over time.

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