Emailed on February 1, 2019 in The Friday Forward

Investment firm, Analytic Investors, publishes a research paper each year that predicts the winner of the Super Bowl, among other outcomes.

The paper is predicated upon a calculation they devised to track each NFL team’s performance. They call it “NFL alpha” and think of it as the football counterpart to their quantitative investment process. In short, it measures the return on investment on every team’s performance relative to vegas money lines for all regular season games.

For example, one would look at a $100 money line bet on the New York Giants to win each of their 16 games. If the Giants lose, one would lose $100. Should the Giants win, one would collect a $100 wager and an additional amount that is a function of the Giants’ win probability, as implied by the wagering odds. At the end of the season, we would total winnings and compare it with the $1,600 total wagered to understand alpha (return on investment for us lay people). 

Cutting to the chase: The 2019 Super Bowl is the first one in the history of this paper to feature two teams who do not have double-digit alphas—the Los Angeles Rams (9.7%) and the New England Patriots (-5.5%).

Analytic Investors' pick is the lower-alpha Patriots to win the game by two or more points. This marks only the second time in the history of their predictions that the pick is a team with a negative alpha. The first time was the Arizona Cardinals in 2009, which was also a correct pick.