Parrondo Paradox and Application to the Financial Markets

Professor Stutzer's research shows the role that misinterpretations of expected returns can play in the seemingly unrelated statistical phenomenon called the Parrondo Paradox; this paradox is described as the possibility that a game being played could have a better chance of losing than winning.
Stutzer showed that individual bets or investments ( which have a better chance of losing), can be turned into diversified portfolios (which have a better chance of winning) especially when following the recommendation to rebalance the portfolio after gains and losses occur.
Learn More: leeds.colorado.edu/publication/11

[@jimparsons6803]

Wrote a couple of programs using BASIC-256, why not, using the information given in this interesting clip and after looking the Paradox on Wikipedia. Seemed to be pretty straight forward. The limitations within the Paradox's definition are pretty stringent, so you have to be careful with the programming. As for how to apply the theory or the programs to a real to life situation, still working on that part. When I took math, I was interested in topology, and there y' go.

[@deaddegenerategeneration7441]

Interesting were both here 14 years later

[@Super_Syrian]

White Gus Fring

[@Waterfound]

Wow