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#1
11-03-2005, 03:50 PM
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Variance and Volitility
Is there a difference between variance and volitility? I mean, we know that NL is very volitile (big swings) but is variance the same?
Basically - if I switch to limit, will my ulcer go away faster? [img]/images/graemlins/smile.gif[/img] 
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#3
11-03-2005, 08:28 PM
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Re: Variance and Volitility
"Variance" is a well-defined term in mathematical statistics. It is the average squared deviation from the mean. "Volatility" is a general English word with different definitions in different contexts. It is used most extensively in Finance, where it means the square root of variance, but it is used in a continuous time context while "standard deviation" would be the term for a fixed time horizon.
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#4
11-03-2005, 10:50 PM
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Re: Variance and Volitility
my swings in NL have been smaller than those in limit. that's style related, but no, your ulcers wont go away, limit is more frustrating than NL, largely because the variance is higher.
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#5
11-03-2005, 11:14 PM
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Re: Variance and Volitility
[ QUOTE ]
"Variance" is a well-defined term in mathematical statistics. It is the average squared deviation from the mean. "Volatility" is a general English word with different definitions in different contexts. It is used most extensively in Finance, where it means the square root of variance, but it is used in a continuous time context while "standard deviation" would be the term for a fixed time horizon. [/ QUOTE ] Uh... ok. [img]/images/graemlins/laugh.gif[/img] Now - in little words? [img]/images/graemlins/wink.gif[/img]
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#6
11-04-2005, 01:34 AM
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Re: Variance and Volitility
I'm still a bit unclear on how Standard deviation would apply to online poker when people generally don't play in uniform sessions. Sometimes I'll play for a 1/2 hour, sometimes 2 or 3. I believe it's faulty reasoning to assume that if you win $50 in an hour that you would've won $100 had you played for two.
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#7
11-04-2005, 01:42 AM
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Re: Variance and Volitility
The swings are MUCH harsher in limit, so if you are bad at dealing with variance, than I would stick to NL.
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#8
11-04-2005, 07:02 AM
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Re: Variance and Volitility
[ QUOTE ]
I'm still a bit unclear on how Standard deviation would apply to online poker when people generally don't play in uniform sessions. Sometimes I'll play for a 1/2 hour, sometimes 2 or 3. I believe it's faulty reasoning to assume that if you win $50 in an hour that you would've won $100 had you played for two. [/ QUOTE ] In your example, it is faulty reasoning to assume that your winrate of $50/hr. over a 1 hr. period will be sustained in perpetuity. Poker is a game with large fluctuations in one's winrate. However, over the long run, you will have a certain winrate (BB/hr or BB/100 hands) through the use of detailed records, and your standard deviation determines how much individual swings in your winrate can deviate from your long-term winrate.
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#9
11-04-2005, 07:14 AM
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Re: Variance and Volitility
[ QUOTE ]
[ QUOTE ] "Variance" is a well-defined term in mathematical statistics. It is the average squared deviation from the mean. "Volatility" is a general English word with different definitions in different contexts. It is used most extensively in Finance, where it means the square root of variance, but it is used in a continuous time context while "standard deviation" would be the term for a fixed time horizon. [/ QUOTE ] Uh... ok. [img]/images/graemlins/laugh.gif[/img] Now - in little words? [img]/images/graemlins/wink.gif[/img] [/ QUOTE ] Variance is a noun (ie. my variance in this game is $10/100 hands), whereas volatility is an adjective (ie. my investment in technology stocks is a volatile strategy).
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