What is variance?

If you’ve been betting on sports for any length of time, you’ve likely experienced the frustrating ups and downs of variance. Those inevitable swings in results can make even the most successful betting systems appear faulty in the short run.

This comprehensive guide explains precisely what variance is, why it happens, and most importantly – how you can manage and overcome it on your path to long-term sports betting profits.

From painful losing streaks to deceptive hot streaks, having experienced a fair share of variance first-hand sculpting and improving our betting approach we know it can be demoralising at times. But stick with us, and you’ll learn proven techniques to handle variance that have helped you continue profiting from betting over the years.

What is Variance in Sports Betting?

In statistics, variance refers to how spread out a set of observations are from their average value. In sports betting terms, it’s the natural fluctuation in results over a series of bets or period of time.

Suppose you have a coin toss. Because either side of the coin has an equal chance of landing you would expect to see heads 5 times when you throw the coin 10 times. However, in practice, it is very likely that the coin lands 7 or 8 times on heads when you throw it 10 times. If the sample size is small, it is perfectly normal to see values deviate from their expected value. The more observations you keep adding the closer the actual value and expected value converge to each other.

In the case of betting, it means that it could be possible that you pick 10 matches on a day where based on the probability 7 matches should end as you predicted, but actually only 1 or 2 end up going your way and vice versa. Low variance means your results will be consistently close to the expected outcome. High variance means there is a lot of randomness and larger swings above and below expectation. The question arises then, what aspects of sports betting determine the variance.

Understanding Variance in Sports Betting: Navigating the Influencing Factors

Now we know what variance is, it is time to look at some of the major elements that can influence the amount of variance you experience as a sports bettor.

• High odds/underdog betting
• Accumulator bets
• Bet type
• Live betting
• Sport you bet on
• Sample size

High odds

Betting on underdogs or longshots that have high odds tends to increase variance. While successful bets on underdogs yield higher returns, they are less likely to occur, contributing to more significant swings in outcomes.

Accumulators

Combining multiple bets in accumulators increases variance. While these bets offer higher potential returns, they require all individual components to be successful, making them riskier.

Bet Types

The types of bets chosen significantly impact the variance in sports betting. Betting on irregular events, such as Cup competitions or cross-sport accumulators, introduces a higher degree of variance compared to regular season match bets. The scarcity of data in such instances makes outcomes less predictable, amplifying the potential swings in results.

Additional Factor: Bet Complexity

• The complexity of the chosen bet type also plays a role. Intricate bets with multiple variables tend to exhibit higher variance, as they inherently involve more unpredictable elements. Furthermore, very specific bets such as which player to score or what team will get the next throw in are very unpredictable and as such have a high variance naturally

Live betting

Betting on live, in-play events can introduce higher variance due to the dynamic nature of sports. Rapid changes in game dynamics and unexpected events during play can lead to more unpredictable outcomes.

Sample Size

The concept of sample size is a critical determinant of variance in sports betting. In smaller sample sizes, luck tends to play a more significant role, leading to a higher level of variance. However, as the sample size increases through a series of bets, results gradually converge toward the expected outcomes, reducing overall variance.

Additional Factor: Bet Consistency

• The consistency of bet types over a larger sample size can influence variance. A consistent betting strategy may lead to more reliable outcomes, whereas frequent shifts in strategy can introduce additional unpredictability.

Sport Dynamics

Intrinsic characteristics of different sports contribute to their varying levels of variance. Sports with fewer events and high scoring volatility, such as the NFL and football, inherently possess higher variance. The sporadic nature of outcomes in these sports introduces an additional layer of unpredictability for bettors to contend with.

Additional Factor: Seasonal Factors

• Seasonal dynamics, including factors like weather conditions or team injuries, can also influence variance within specific sports, introducing external elements that impact the predictability of outcomes.

Understanding these multifaceted factors is essential fif you want to bring your betting to the next level. By recognizing the nuanced elements that contribute to variance, you can refine your strategies and make more calculated decisions in pursuit of success. We at the hunch club for example always make sure that we take the variance into consideration when generating our betting tips by carefully considering the odds,bet types and sports we bet on.

How Variance Influences Your Sports Betting Results

No matter how good your betting system is, you will always experience variance. This is just statistical nature and is something you should always prepare yourself for. You’ll see fluctuations above and below expectations along the way. Winning and losing streaks can happen easily and can derail you from your original strategy. It can be very frustrating when hitting a bad swing but equally exciting when you hit a hot streak.

Here are some of the implications of variance on your betting process:

• losing runs
• clouded judgement
• emotional impact
• deceptive winning streaks

Losing Runs

Even the best systems hit losing runs of 10+ bets. This can strain your bankroll if you lack the capital to ride out downturns. Therefore it is crucial to have a proper staking and bankroll management strategy to make sure you can handle losing runs. This will ease your mind a little bit and allow you to better cope with losing runs from an emotional point of view.

Difficulties in Judging a System’s Value

Judging a system on limited data may lead you to incorrectly conclude it has no value after an early losing run. You need a meaningful sample size to determine expected value. Preferably > 100 or even > 1000 bets as a sample size to make reliable decisions. If possible test out your system on past data as your sample size is virtually unlimited in this case. This is of course only applicable if you can objectively judge what you would have predicted for past games.

Emotional Impact

Wild swings in your betting result can be demoralising and affect your discipline. Don’t make rash decisions during high variance periods. Stay rational and keep analysing and testing your strategy to make sure that your system is reliable. Do not throw your system out of the window in a small losing streak but neither think you are the king of the world in a winning streak.

Deceptive Hot Streaks

Winning runs happen too. Enjoy them but don’t dramatically increase stakes assuming you’ve suddenly discovered a winning secret. Always stick to your outlined strategy to ensure that you do not incur any unnecessary additional risk for uncertain extra return. It could only take a few risky bets going wrong to undo all your previous hard work.

How To Manage Variance When Betting On Sports

Variance is part of the sports betting game and it will never go away. Therefore the ability to cope with variance is a crucial skill for aspiring sports bettors. Below are several strategies we recommend to help you to effectively deal with variance in your betting:

• Sufficient Betting Bankroll

To withstand 10+ bet losing runs, you need to have a sufficiently sized bankroll relative to the amount you stake for each bet. In case you use fixed stake sizes have at least 50-100 times the amount of your fixed stake size in bankroll. So stake size of 15 ideally means you have a total bankroll of 1500. If you use relative stake sizes, always have a sensible maximum stake size of 1-5% depending on your risk appetite. A stake size of 2% means that you in theory can handle 49 losses in a row before completely running down on your bankroll.

• Don’t Chase Losses

Stick to your system even after losses. It can be very tempting to place a big bet after a loss to make up for the lost money but this often only worsens the situation. Your negative emotional state after a loss can prevent you from making good betting decisions and can increase the losses even further.

• Track Results

Monitoring performance over a meaningful sample lets you make informed decisions, not react to noise. Track results over the long term and base your decisions only on the long term implications. This way you prevent immediately throwing a profitable system out of the window at the first signs of setback or downturn. Remember, even the best systems have losing months.

• Focus on Process

If you have confidence in your system, draw comfort from making the right betting decision. You can’t control the result but you can control your reaction. Spend a lot of time preparing and testing your system and have faith in your system. Use your own result to carefully analyse your progress and tweak where necessary.

• Take a Break

Step back if variance impacts you emotionally. Come back fresh and refocused. A reset can work wonders. Maybe the sport you normally bet on takes a summer break which you can use to take a step back, or deliberately take on or 2 weeks with decreased or no betting activity at all to clear your mind and start fresh.

• Don’t Overbet

Avoid dramatically increasing stakes during hot streaks. Stay disciplined and keep bet sizes appropriate. Overbetting when you are feeling very positive or when you want to chase only lead to increased risk and often are detrimental to overall profitability and results.

• Think Long-Term

Sports betting is a marathon, not a sprint. Consistency is vital to long-term profits. Keep variance in perspective.With the right mindset and strategies, variance doesn’t need to be your enemy. Managing it prudently will serve you well in the long run.

• Expect Variance

Losing and winning runs are inevitable. Mentally prepare yourself. Don’t let them catch you off guard. If you expect the worst the reality can only be positive, this mindset shift is instrumental in being successful long-term.

• Find a community

Other experienced bettors have been through similar. There’s comfort knowing many face variance. Finding like minded people who have experience with what you’re facing can be a great reassurance. In our community at the Hunch Club we aspire to help all our members become better bettors. Find more info on joining our community here(link)

In Summary

We have discussed variance in sports betting in this article. From the main factors that influence the effect of variance to several strategies to limit the variance in your betting and also limit your emotional involvement. We hope this comprehensive guide has helped explain precisely what variance is and how it impacts sports betting. More importantly, you’re now armed with proven strategies to manage variance on your journey to long-term profits.