The Chebyshev Inequality states that ~89% of values fall within 3 standard deviations of the mean.
Is this true for the Value Betting Engine, when mean and variance are clearly defined?
| SYMBOL | CHEBYSHEV INEQUALITY |
|---|---|
| AGI | 89% |
| AUY | 86% |
| AXU | 90% |
| BVN | 89% |
| CDE | 87% |
| DYLLF | 83% |
| EQX | 82% |
| EXN | 85% |
| FSM | 91% |
| GAU | 88% |
| HCHDF | 91% |
| HL | 88% |
| HMY | 90% |
| IAG | 90% |
| MNRLF | 86% |
| USAS | 86% |
| AVERAGE | 88% |
RESULT: TRUE
THIS IS SIMPLY ANOTHER MEANS BY WHICH TO ILLUSTRATE THAT ACTIONABLE EDGES EMERGE RARELY.
If the average exceeded 89%, it would be safe to assume that either our understanding of price distributions was incorrect or that a flaw had been built into the Value Betting Engine source code.
I was relieved to find that all issues evaluated by the VBE conformed to the expectations as demanded by Chebyshev’s Inequality.
