Quantitative#116

Resolution-Correlation Budgeted Sizing

This is a sizing rule, not a trade signal. Instead of treating each position as independent, map every market to its shared resolution drivers (the same election, the same crypto price level, the same UMA question family) and cap your total exposure to each underlying factor. The benefit is capital preservation: it stops the hidden concentration where 20 'diversified' bets are really one bet that all resolves off a single event.

What you need to run it

Mapping of markets to shared resolution factors/oracles
Estimated correlation matrix from historical co-movement
Per-factor exposure cap + optimizer (mean-variance or risk-parity)
Position-level USDC accounting across the book

Where this applies

Markets on Polymarket where resolution-correlation budgeted sizing is the natural play:

Will Republicans win the 2026 Senate majority? plus five same-cycle Senate races (one shared factor)
Will BTC close above $100k on Dec 31, 2026? plus correlated ETH and SOL threshold markets
Will a Gaza ceasefire hold through 2026? plus related Middle-East geopolitics markets

Capabilities this demands

Model / quantData ingestionRisk managementCustom code / API

At a glance

CategoryQuantitative

Requirements4

CapabilitiesModel / quant, Data ingestion, Risk management, Custom code / API

VenuePolymarket (CLOB, Polygon)

Build it

Related quantitative strategies

This is documentation, not advice. Poly Research & Robotics publishes how these strategies work because the method should be checkable — not as a recommendation to trade them. See the full strategy database (147 strategies) or the data resources directory.