There was an interesting article published in the journal of Critical Finance Review a while ago that studied the effect that the National Football League game outcomes impacted Wall Street. Under review were how Home Game scores impacted the stock prices for companies that sponsor the NFL.
This relationship is direct, meaning wins are associated with higher sponsor returns and losses associated with lower returns.
The study is based on data from about 3,400 games, 21 teams and 26 sponsoring companies from 1997 through 2013. The research was conducted by Assaf Eisdorfer and Elizabeth Kohl.
The researchers’ findings include:
- On the next stock-market trading day following a home team win in a televised Monday night game, the team’s stadium sponsor earns a stock return that averages 0.51 percent higher than if the team had lost.
- After postseason games, the losing teams’ sponsors earn a stock return that averages 0.82 percent lower than that of the winning teams’ sponsors.
- Similarly, after games with unexpected outcomes (as determined by pregame betting spreads and past performances), the home team sponsor earns a stock return that varies by 0.81 percent, depending on whether the home team wins or loses.
The researchers attribute their findings at least partly to what they call sentimental investing.