👉 Kelly Math is a statistical framework used to analyze and predict the optimal strategies for maximizing returns in situations involving repeated trials with uncertain outcomes, particularly when there's a risk of loss. It was developed by Paul Kelly and focuses on the trade-off between taking risks and playing it safe, based on the probability of success in each trial. The core idea is to determine the proportion of time to invest in a risky option versus a safer one that guarantees a return, given the expected value and variance of outcomes. Kelly Math introduces the Kelly Criterion, a formula that calculates the optimal fraction of bets to place in a risky proposition to maximize long-term growth, taking into account the odds of winning and the variance of returns. This approach is particularly useful in fields like sports betting, trading, and investment strategies where understanding the balance between risk and reward is crucial.
