Volatility and Variance: how does it work?May 8, 2020
The terms volatility and variance are usually used to describe online casino slots. Many players express the same by these two words, so are these terms really synonymous? Actually not, they are very close but have some differences.
What is Variance?
Variance is a statistical term that describes the range of deviations from slot’s RTP (return to player). For example, we have a slot with 96% RTP, this means that on long distance 96% of all bets made will be returned to the players. But what if the amount of the bets made is too low? In such kind of the period RTP value becomes about 60% and the variance will increase in order to reach set percentage value. While high variance the winning amount rises. At the same time a large number of bets will decrease the variance, what tells us that slot’s RTP is about 96%. Variance term is usually used by online casino managers to see the profit of the project.
What is Volatility?
Volatility is the term that describes slot’s gameplay. In other words, slot volatility shows how often you are likely to catch a winning combo, the size of the wins, and the game’s level of risk. There are five main volatility types: low, low-medium, medium, medium-high and high. Slots with low volatility level are to give small wins and frequently, high volatility slots are just the opposite – big wins but quite rarely.
In conclusion we may say that the Variance descries if the slot is hot at the moment, and Volatility helps us to figure out what kind of risk we are going to take.
These days both terms are usually used as synonyms describing the gameplay, but now you know the difference.