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In antenna diversity systems, mutual coupling of closely-spaced antennas alters the element radiation and impedance properties, thereby impacting the system diversity performance. Past studies have emphasized the effect of the distorted pattern and largely neglected the effect of altered impedance (and therefore receive signal-to-noise ratio) on the diversity behavior. Here, we present a new network analysis which facilitates a complete characterization of the system and comparison of diversity performance for various impedance terminations. Representative results reveal that for closely-spaced antennas, the termination can play a noticeable role in determining the diversity gain offered by coupled antennas.