Define Variance

[Unanamis]

So does one find variance between the hands lost vs the hands won, the hands lost vs the amount won, the amount lost vs the hands won, or the amount lost vs the amount won? I've found a goldmine of a side bet, but I think the variance could completely wipe it out as a possibility when considering my bankroll.

I'm going to base my bets on the Kelly Criterion to make sure everything's okay. That said, which of the above combinations would I need to figure out the covariance as well? I'm using the formulas in excel to find these numbers, so I just need to know what to input more than anything else.

Thanks

 

[DSchles]

Is the payoff even money or do winning bets get paid at a multiple? Your question can't be answered the way you asked it.

Don

 

[Unanamis]

I'm sorry for the late response. I just got back from a 2.5 week blackjack trip.

The bets would be payed at a multiple.

 

[DSchles]

When bets are paid at a multiple, the precisely correct Kelly wager is the advantage divided by the ratio of the payoff of a winning bet to that of a losing bet. So, the higher that multiple, the lower the Kelly wager.

Don