Calculating the type of market

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CallumPerry
Posts: 532
Joined: Wed Apr 19, 2017 5:12 pm
Location: Wolverhampton

For analysis purposes, I want to see how a handful of strategies perform in different types of markets. For example, a race with: a clear fav, two short priced favs, three, four etc. My question is, mathematically, how do I define this?

Has anybody got a calculation they've used/are using to 'define' the type of market in that moment? I was thinking of turning the odds into implied probabilities and then using these values 0%-100% in the calculation?

Anybody got any ideas?
Anbell
Posts: 1016
Joined: Fri Apr 05, 2019 2:31 am

CallumPerry wrote:
Wed Apr 07, 2021 10:04 pm
For analysis purposes, I want to see how a handful of strategies perform in different types of markets. For example, a race with: a clear fav, two short priced favs, three, four etc. My question is, mathematically, how do I define this?

Has anybody got a calculation they've used/are using to 'define' the type of market in that moment? I was thinking of turning the odds into implied probabilities and then using these values 0%-100% in the calculation?

Anybody got any ideas?
One way to do it is by summing the implied probabilities and counting how many animals it takes to get to 60% or 90% or whatever threshold makes sense.
CallumPerry
Posts: 532
Joined: Wed Apr 19, 2017 5:12 pm
Location: Wolverhampton

Screen Shot 2021-04-11 at 11.38.06.png
Here are an example 6 markets. The odds in the first 6 rows (+ Book %), implied probability in the second lot of 6 rows and the cumulative frequency of the implied probability in the final 6 rows.

The red text is just by eye balling it, I've decided on the labels 'Fav' if there is one strong favourite, 'Duo' for two and 'Try' for three, maybe I also need a 'Competitive' if there are more than three.

My question is, how would you use these cumulative frequency values to arrive at the red text labels? What could be a sensible threshold to set? Does anybody else do anything similar to this to analyse how they perform in different types of markets? I'm interested in reading others' thoughts too, if anybody has got anything to add?
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Atho55
Posts: 489
Joined: Tue Oct 06, 2015 1:37 pm

I do a sum on groups of odds then return the total to all within the group. Looks like this

Odds Sum.jpg
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burntheory
Posts: 49
Joined: Tue Sep 09, 2014 9:49 am

CallumPerry wrote:
Wed Apr 07, 2021 10:04 pm
For analysis purposes, I want to see how a handful of strategies perform in different types of markets. For example, a race with: a clear fav, two short priced favs, three, four etc. My question is, mathematically, how do I define this?

Has anybody got a calculation they've used/are using to 'define' the type of market in that moment? I was thinking of turning the odds into implied probabilities and then using these values 0%-100% in the calculation?

Anybody got any ideas?
For many years I've been calculating a value I call implied average winning percentage (IAWP) for events/races. It's based on normalized percentages at the time data is collected, where 50% is 0.5 (of a win), e.g. a 3 runner race might be 0.5, 0.3 and 0.2.

The IAWP calculation would be(0.5^2)+(0.3^2)+(0.2^2) = 0.38. This splits the race into two parts, i.e, >=0.38 and <0.38. Using this calc, only the favourite would qualify. Similarly, in your last example, only the favourite would qualify, excluding 2nd fav.

Using this method allows for analysis of different markets, or groups within markets, that tends to be less noisy than bare strike rates or P/L figures.
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