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Variance and volatility can be confusing terms for new slots players. In today's Ask Genie article we’ll be looking more closely at what variance means in online slots. Variance is a statistical word that is commonly employed in poker games and has now made its way into the slot sector. It depicts the deviation from a predetermined expectation, which in the case of slots is usually the Return to Player rate. Many slot players focus on the RTPs, but the variance demonstrates how much the outcomes of your spins might fluctuate in the near future. If that still sounds a little confusing, don’t worry, just keep on reading as we’ll explain this in more detail.
Slot Variance vs. Slot Volatility
Volatility and variance are terms that are often used interchangeably in slot machine reviews and articles, but they’re actually two different, albeit similar terms. Let’s define what these two terms mean once and for all!
Variance
The distribution of long-term results is measured by variance. Simply expressed, it assesses the degree to which findings deviate from the statistical average. Standard deviation, a square root of variance that more closely captures the average gap between findings, should not be mistaken for variance. Rather than providing a harsh number like standard variation, it assesses how likely outcomes are to alter.
As an example,
In Michigan, the weather is more likely to change than in Hawaii. As a result, the weather in Michigan is more variable. Another feature of this phrase is that it is not constrained by any particular period of time, such as a week or a month. It takes into account the likelihood of long-term change.
Volatility
In the same way that variance measures the distribution of results, volatility does as well. The main difference is that it is constrained by a set time. Volatility is defined as the difference in weekly car sales over the course of a month. Variance, on the other hand, does not necessitate a one-month limit on results. Volatility is a useful metric for assessing short-term changes in a set of data. It assists you in determining the level of risk you're incurring in the short term.
How Variance Impacts Your Slot Bankroll
The bigger the variance of an online slots game, the greater the chance of losing, known as 'risk of ruin' The risk of ruin refers to the possibility of losing your entire bankroll in a short period of time.
As you can see, understanding whether you’re playing low variance slots or high variance slots can have a huge impact on your bankroll management strategies. If you want to learn more about bankroll management, then read our helpful guide on Ask Genie: What is a Casino Bankroll?
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