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Diamagnetic materials are characterized by the presence of all paired electrons in their atomic or molecular structure. This electron configuration leads to the material having no net magnetic moment. As a result, when exposed to an external magnetic field, diamagnetic materials do not show a permanent magnetic dipole moment and are only weakly repelled by magnetic fields.

In contrast, materials that are attracted to external magnetic fields typically contain unpaired electrons, which are not the case in diamagnetic substances. The absence of unpaired electrons means that there are no individual magnetic moments that can align with an external magnetic field to enhance its effects, which differentiate diamagnetic materials from paramagnetic or ferromagnetic materials that do respond significantly to magnetic fields.

Thus, the defining feature of diamagnetic materials is indeed that they contain all paired electrons, making this characteristic critical for understanding their behavior in magnetic environments.