maraphon-app/tests/Marathon.Domain.Tests/Betting/KellyCalculatorTests.cs

using FluentAssertions;
using Marathon.Domain.Betting;

namespace Marathon.Domain.Tests.Betting;

public sealed class KellyCalculatorTests
{
    // ── SuggestStake: edge handling ───────────────────────────────────────────

    [Fact]
    public void Should_ReturnZeroStake_When_NoPositiveEdge()
    {
        // p·o = 0.50 × 1.90 = 0.95 < 1 → negative edge.
        var stake = KellyCalculator.SuggestStake(
            winProbability: 0.50m, decimalOdds: 1.90m, bankroll: 1000m);

        stake.Should().Be(0m);
    }

    [Fact]
    public void Should_ReturnZeroStake_When_ExactlyBreakeven()
    {
        // p·o = 0.50 × 2.00 = 1 → zero edge.
        var stake = KellyCalculator.SuggestStake(
            winProbability: 0.50m, decimalOdds: 2.00m, bankroll: 1000m);

        stake.Should().Be(0m);
    }

    [Fact]
    public void Should_SizeQuarterKellyStake_When_PositiveEdge()
    {
        // full = (0.55×2.10 − 1)/(2.10 − 1) = 0.155/1.10 = 0.140909…
        // quarter = 0.0352272… × 1000 = 35.2272… → truncated to 35.22.
        var stake = KellyCalculator.SuggestStake(
            winProbability: 0.55m, decimalOdds: 2.10m, bankroll: 1000m, fraction: 0.25m);

        stake.Should().Be(35.22m);
    }

    [Fact]
    public void Should_UseFullKelly_When_FractionIsOne()
    {
        // full = (0.60×2.00 − 1)/(2.00 − 1) = 0.20 → 0.20 × 1000 = 200.
        var stake = KellyCalculator.SuggestStake(
            winProbability: 0.60m, decimalOdds: 2.00m, bankroll: 1000m, fraction: 1.0m);

        stake.Should().Be(200m);
    }

    [Fact]
    public void Should_ScaleStake_Proportionally_WithBankroll()
    {
        var small = KellyCalculator.SuggestStake(0.60m, 2.00m, bankroll: 500m, fraction: 1.0m);
        var large = KellyCalculator.SuggestStake(0.60m, 2.00m, bankroll: 1000m, fraction: 1.0m);

        small.Should().Be(100m);
        large.Should().Be(200m);
    }

    [Fact]
    public void Should_NeverExceedComputedFigure_When_Truncating()
    {
        // Raw quarter-Kelly stake is 35.2272…; the suggestion must floor, not round up.
        var stake = KellyCalculator.SuggestStake(0.55m, 2.10m, bankroll: 1000m, fraction: 0.25m);

        stake.Should().BeLessThanOrEqualTo(0.25m * KellyCalculator.FullKellyFraction(0.55m, 2.10m) * 1000m);
    }

    // ── FullKellyFraction ─────────────────────────────────────────────────────

    [Fact]
    public void FullKellyFraction_Should_ComputeEdgeFraction()
    {
        KellyCalculator.FullKellyFraction(0.55m, 2.10m)
            .Should().BeApproximately(0.140909m, 0.000001m);
    }

    [Fact]
    public void FullKellyFraction_Should_BeNegative_When_NoEdge()
    {
        KellyCalculator.FullKellyFraction(0.40m, 2.00m).Should().Be(-0.20m);
    }

    [Fact]
    public void FullKellyFraction_Should_BeZero_When_Breakeven()
    {
        KellyCalculator.FullKellyFraction(0.50m, 2.00m).Should().Be(0m);
    }

    // ── Guard clauses ─────────────────────────────────────────────────────────

    [Theory]
    [InlineData(0.0)]
    [InlineData(1.0)]
    [InlineData(-0.1)]
    [InlineData(1.1)]
    public void SuggestStake_Should_Throw_When_ProbabilityOutOfOpenInterval(double probability)
    {
        var act = () => KellyCalculator.SuggestStake((decimal)probability, 2.0m, 1000m);

        act.Should().Throw<ArgumentOutOfRangeException>();
    }

    [Theory]
    [InlineData(1.0)]
    [InlineData(0.5)]
    public void SuggestStake_Should_Throw_When_OddsNotGreaterThanOne(double odds)
    {
        var act = () => KellyCalculator.SuggestStake(0.55m, (decimal)odds, 1000m);

        act.Should().Throw<ArgumentOutOfRangeException>();
    }

    [Fact]
    public void SuggestStake_Should_Throw_When_BankrollNegative()
    {
        var act = () => KellyCalculator.SuggestStake(0.55m, 2.10m, bankroll: -1m);

        act.Should().Throw<ArgumentOutOfRangeException>();
    }

    [Theory]
    [InlineData(0.0)]
    [InlineData(-0.25)]
    [InlineData(1.5)]
    public void SuggestStake_Should_Throw_When_FractionOutOfRange(double fraction)
    {
        var act = () => KellyCalculator.SuggestStake(0.55m, 2.10m, 1000m, (decimal)fraction);

        act.Should().Throw<ArgumentOutOfRangeException>();
    }
}