Calculating risk with kelly formula????

jee_pack

Well-Known Member
#1
This is a longshot, I'd like to know if its possible to find a risk multiplyer using the kelly formula. Why? Well I know that if you take a 100$ bet and split it in 2 to bet 50$ on each of 2 hands, your Risk is lowered and the EV is the same (not taking into account the card depletion rate). So just with that information, can you calculate how much you are reducing the risk in percentage using the kelly fraction?

for example:

b = bankroll
edge = .5%
1 hand bet = 100

so the kelly formula is:

b * 0.005 / 1.33 = 100

and if you play the 2 hand bet:

b * 0.005 / 1.83 = 50
?? is this right?

now this gives you 2 fractions:

1 hands and 100$ = bankroll = 1.33 x 100 / 0.005 = 26600$
2 hands and 50$ each = bankroll = 1.83 x 50 / 0.005 = 18300$

kelly fraction for 1 hand:
bet/bankroll = 100/26600 = 1/266

kelly fraction for 2 hands:
bet/bankroll = 50/18300 = 1/366

So first off, is this how you calculate the kelly fraction?

And if yes, how do you calculate the difference in risk in a percentage? to be able to say, the 1/366 kelly fraction involves X% less risk than the 1/266 kelly fraction....


Thanks a lot in advance
 
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