ADVANCED PARLAY GUIDE

Correlated Parlays Explained

Expert guide to dependent-leg parlays: sportsbook restrictions, real examples, calculation methods, and 2025 betting strategy.

What Is a Correlated Parlay?

A correlated parlay combines multiple bets where the outcomes are statistically linked rather than independent. In traditional parlays, all legs are independent—betting on the Saints to beat the Cowboys and the Celtics to beat the Lakers. In correlated parlays, the legs share an underlying relationship that increases or decreases their probability together.

Example: Kansas City Chiefs moneyline (-200) + Patrick Mahomes Over 1.5 passing touchdowns (+120). If the Chiefs win convincingly, Mahomes is statistically more likely to throw multiple TDs. These outcomes are linked—hence the correlation.

Why Correlation Matters

Sportsbooks price parlays assuming independence. When legs are correlated, the book's odds can become mispriced. This is why books restrict certain correlations—to protect their margins.

Sportsbook Restrictions: What's Allowed?

Parlay Type	Allowed?	Reason
Team ML + Player Prop (different player)	✓ ALLOWED	Lower correlation between team outcome and individual props
Team ML + Team Total Over	✗ RESTRICTED	Strong positive correlation—team win usually means higher score
Home Team ML + Over Game Total	✗ RESTRICTED	Home teams correlate with total scoring patterns
Player 1 TD + Player 2 TD (same offense)	⚠ VARIES	Different books allow/restrict—depends on scoring environment
Team ML + Opponent Under	✗ RESTRICTED	Direct negative correlation—team wins = opponent scores less

Note: Restrictions vary by sportsbook and sport. DraftKings, FanDuel, BetMGM, and PointsBet have different policies. Always check the parlay rules before betting.

Real-World Examples (2025 Season)

NFL: Kansas City vs Buffalo

Leg 1: Chiefs ML (-130)

Implies 56.5% win probability

Leg 2: Mahomes 2+ Pass TDs (+115)

Historical: 78% when Chiefs win by 3+

Correlation: ~0.72 (strong positive). Book likely restricts this.

NBA: Celtics vs Lakers

Leg 1: Celtics ML (-200)

Implies 66.7% win probability

Leg 2: Game Over 215 (-110)

Correlation: ~0.55 (moderate)

Reason: Celtics playing fast = higher pace, higher total scoring

MLB: Yankees vs Red Sox

Leg 1: Yankees ML (-140)

59.3% implied probability

Leg 2: Judge 1+ HR (+120)

Court data: 41% when Yankees win, 18% when they lose

Correlation: ~0.68 (high). Typically restricted.

Why Sportsbooks Restrict Correlated Parlays

1

Probability Mispricing

Books calculate parlay odds by multiplying individual leg probabilities (assuming independence). When legs are correlated, actual probability ≠ book's calculation. Correlation can create +EV bets for sharp bettors.
2

Variance Concentration

Independent parlays create diversified risk. Correlated parlays concentrate risk into single underlying outcomes. If that outcome moves against the book, losses can be massive.
3

Hedging Difficulty

Books hedge positions by laying off correlated bets. Correlated parlays are harder to hedge efficiently because multiple markets move together. Books protect margins by restricting them.
4

Arbitrage Opportunities

Sharp bettors exploit correlated parlays across books with different restrictions. By finding mispricings in correlation assumptions, they lock in guaranteed profits.

How to Calculate Correlated Parlay Odds

Mathematical Framework

Step 1: Convert Odds to Implied Probability

Formula: Prob = 1 / (Decimal Odds)

Example: -200 odds = 2.0 decimal odds = 50% probability

Step 2: Determine Correlation Coefficient (ρ)

Range: 0.0 (no correlation) to 1.0 (perfect correlation)

Team win + team over: ρ ≈ 0.65 | Team win + opponent under: ρ ≈ -0.50

Step 3: Apply Correlation Adjustment

Combined Probability = P(A) × P(B|A) [not P(A) × P(B)]

Where P(B|A) is the conditional probability of B given A occurs

Step 4: Convert Back to Odds

American Odds = (1 / Probability - 1) × 100 [for positive odds]

Or: -100 / (Probability / (1 - Probability)) [for negative odds]

Worked Example: NFL Parlay

Setup: Chiefs ML (-130) + Mahomes 2+ Pass TDs (+120)

Independent Calculation (Incorrect):

P(Chiefs win) = 56.5%

P(Mahomes 2+ TDs) = 45.5%

Combined (if independent): 56.5% × 45.5% = 25.7% → +289 American odds

⚠ This ignores that correlated outcomes have higher actual probability

Correlated Calculation (Correct):

Correlation coefficient (ρ) = 0.70

P(Mahomes 2+ TDs | Chiefs Win) = 78% (conditional probability)

Combined: 56.5% × 78% = 44.1% → -79 American odds

✓ More accurate—accounts for relationship between outcomes

The actual odds books offer will land between these calculations, factoring in their edge and liability exposure.

5 Correlated Parlay Mistakes

Mistake #1: Ignoring Book Restrictions

Placing a parlay the sportsbook has restricted. Your bet may be voided, stakes returned, or the leg removed entirely. Always verify parlay eligibility before confirming.

Mistake #2: Mispricing Correlation

Assuming higher correlation than actually exists (e.g., thinking player props are 0.8 correlated when they're 0.5). This leads to overbetting on incorrect odds.

Mistake #3: Simple Odds Multiplication

Using -150 × +200 calculation without accounting for correlation. This works for independent legs but severely underestimates true parlay odds.

Mistake #4: Negative Correlation Blindness

Betting team moneyline + opponent under. Negative correlation (ρ ≈ -0.5) means the second leg becomes LESS likely if the first hits. Books won't allow this.

Mistake #5: Ignoring Sharp Line Movement

Professional bettors move team totals independently from point spreads. If one correlated leg moves but the other doesn't, your correlation assumption breaks down.

Mistake #6: Over-Complicating Edge

Thinking correlation automatically creates value. It doesn't. You still need BOTH legs to be positive EV individually. Correlation just improves odds if legs are already +EV.

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Written by Dave Baghi • Updated daily

Featured images sourced from Wikimedia Commons