Correlation Between Story and Resolv

Can any of the company-specific risk be diversified away by investing in both Story and Resolv at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Story and Resolv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Story and Resolv, you can compare the effects of market volatilities on Story and Resolv and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Story with a short position of Resolv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Story and Resolv.

Diversification Opportunities for Story and Resolv

-0.56

Correlation Coefficient

Story  Resolv

Excellent diversification

The 3 months correlation between Story and Resolv is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Story and Resolv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resolv and Story is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Story are associated (or correlated) with Resolv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resolv has no effect on the direction of Story i.e., Story and Resolv go up and down completely randomly.

Pair Corralation between Story and Resolv

Assuming the 90 days horizon Story is expected to generate 27.19 times less return on investment than Resolv. But when comparing it to its historical volatility, Story is 18.29 times less risky than Resolv. It trades about 0.08 of its potential returns per unit of risk. Resolv is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Resolv on April 23, 2025 and sell it today you would earn a total of  15.00  from holding Resolv or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Story  vs.  Resolv

Story

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Story are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Story exhibited solid returns over the last few months and may actually be approaching a breakup point.

Resolv

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Resolv are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Resolv sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Story and Resolv

The main advantage of trading using opposite Story and Resolv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Story position performs unexpectedly, Resolv can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Resolv will offset losses from the drop in Resolv's long position.

The idea behind Story and Resolv pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.