ROI and ROC in sports betting, what exactly are they?
In the field of sports betting, it is common for players to confuse the concept of return on investment (ROI) and return on capital (ROC) when evaluating their betting performance. It is therefore important to note that these two measures are quite distinct from each other.
Let's concentrate on a full clarification...
The difference between ROI and ROC in sports betting
To illustrate this, let's consider a scenario where we have managed to increase our bankroll from €2,000 to €3,000, resulting in a profit of €1,000 over the year. In this case, our return on capital (ROC) can be calculated by dividing the profit (€1,000) by the initial bankroll (€2,000), which gives a percentage of 50%. The return on capital represents the growth of your bankroll over a given period.
Conversely, when it comes to betting, the concept of return on investment refers to the ratio of total profits compare to the total amount of money wagered. It explains how much we win or lose for every coin we place in bets. Let's say we place 300 bets over a period of one year, with an average bet of €50. Therefore, the total amount wagered would be €15,000 (300x50). By dividing the winnings (€1,000) by the total amount bet (€15,000), we arrive at a return (or return on investment) of 6.67%.
How can ROI and ROC be linked?
We can establish a correlation between the return on capital and the return on investment using the following equations:
Retour sur investissement = Profit / Total Stakes
Assumed Profit = Initial Bankroll x Average Stake (%) x % ROI x Number of choices
Return on capital = Profit / Initial bankroll
To further illustrate this relationship, let's look at an example:
Consider a punter who starts with an initial bankroll of €2,000. He wants to determine his potential winnings over the course of a year, with an expected return of 6% on 500 bets. He decides to adopt a strategy, in which he systematically bets 1% of his initial bankroll, i.e. 20 (1% of €2,000) on each bet. On the basis of these figures we can estimate his profits for the following year as follows :
Profit = €2,000 x 1% x 6% x 500 = €600
Now let's calculate the portfolio's return on capital:
ROC = €600 / €2,000 = 30.00 %
It's worth noting that a higher ROI, average stake and number of predictions will consequently increase the portfolio's return on capital.
Maximising your chances of winning at sports betting
Simply put, generating a positive return means you can maximise your winnings by increasing your stake. However, it is important to point out that it also increases the risk of potential loss.
Achieving a balance between profitability and risk is a crucial aspect in the world of sports betting. Increasing the number of bets will normally result in higher winnings. However, if you increase number of predictions, it is highly likely that returns will be negatively impacted. This is what is commonly known as "overbetting".
The secrets of making a profit from your predictions
The whole explanation above revolves around several factors to be taken into account when you decide to 'professionalise' your betting strategy. The first thing to remember is that you should never get carried away. You've done a few tests, you're starting to get a consistent number of bets and your ROI is clearly positive?
Congratulations, that's excellent news. Despite everything, you shouldn't remember that betting is a marathon and you need to think long-term. If your test is on less than 1,000 or 2,000 bets, then the sample is still too small to be exploited. First of all, make sure that you are profitable over the long term before starting to increase your volume and your base bet.
The second thing to include in your thinking and in your way of betting is, of course, composure. Even if you have a large sample size, it is almost inevitable that there will be slack periods in sports betting. This is known as variance.
It's essential that you stay calm and don't overplay just because you're in a good mood, in a good betting period and that your recent ROI is largely positive. Keep consistency in mind, as this is what will make you a better bettor.
Summing up the content of this article, it's important to note that there are many factors involved in your betting life. your life as a sports bettor.
To be the best, it's not enough to simply select the right bets. You also need to bear in mind that statistics are inseparable from the overall performance of your bankroll. overall performance of your bankroll. Keep it simple, don't change the way you do things if they're working, and try to be as clear-headed as possible throughout your your sports betting journey.
Don't hesitate to tell us in the comments what you consider to be the essential qualities of a good bettor.
We look forward to hearing from you.
Tuesday, June 20, 2023
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