View Full Version : Diff b/t ROI + ROR???
wegs the wegs
08-11-2004, 09:06 PM
From what I have been told ROI is Return on Investment. What is ROR and how is it calculated?
durron597
08-11-2004, 09:17 PM
RoR = Risk of ruin. It has very little to do with ROI, it is a function of your profit/tourney, standard deviation on profit/tourney, and bankroll. It's equal to
P = profit/tourney
B = bankroll
S = standard deviation
Then RoR = e^(-2PB/(S^2)).
AleoMagus
08-11-2004, 09:19 PM
Risk of Ruin
R=EXP(-2HB/S^2)
where:
R=Risk of Ruin
B=Bankroll
S=Standard deviation/tourney (or per hour in ring games)
H=Win rate. Avg profit/tourney (or hourly rate in ring games)
B=-(S^2/2H)LN(R)
is to determine bankroll requirements for a given risk of ruin
Regards
Brad S
wegs the wegs
08-11-2004, 09:26 PM
Then on to asking another beginner question...
What is used to calculate the standard deviation? I know how to work with standard deviation from college stats class, but what poker results and numbers are used?
AleoMagus
08-11-2004, 09:31 PM
For a typical sng paying three spots, SD is calculated as follows:
SD=SQRT((Probability of 1st)(net profit for 1st)+(Probability of 2nd)(net profit for 2nd)+(probability of 3rd)(net profit for 3rd)+(probability of finishing out of the money)(net loss)+(avg profit/tourney^2))
Regards
Brad S
AleoMagus
08-11-2004, 11:05 PM
oops, looking at that again, I realized I made an error
it should read:
SD=SQRT((Probability of 1st)(net profit for 1st^2)+(Probability of 2nd)(net profit for 2nd^2)+(probability of 3rd)(net profit for 3rd^2)+(probability of finishing out of the money)(net loss^2)+(avg profit/tourney^2))
Sorry about that
Brad S
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