Fractional Kelly
The practitioner adjustment to full-Kelly sizing that risks a fraction (typically a quarter to a half) of the mathematically growth-optimal fraction in order to trade some long-run growth for substantially reduced drawdowns and greater behavioral durability. Half-Kelly captures about three-quarters (75%) of full-Kelly's long-run growth rate with about half the volatility; quarter-Kelly captures about 44% but is far more survivable through edge mis-estimation and fat-tailed return distributions. Most professional fundamental investors size positions in the quarter-Kelly to half-Kelly range. The right fraction is empirical, not theoretical.
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