Polynomial cancellation coding orthogonal frequency division multiplexing (PCC-OFDM) reduces OFDM system sensitivity to carrier frequency offset (CFO). However, PCC-OFDM suffers from performance degradation in severe fading channels. This paper provides mathematical analysis of PCC-OFDM subjected to carrier frequency offset with diversity reception over Nakagami fading channel. Closed form expressions of symbol error rate are developed in some cases. Effect of correlation among diversity branches is included. Performance improvement due to the application of diversity reception is demonstrated