Score some stock returns for us!
As many of you might know, if you’ve been following Squirrelers, I sometimes delve into data to identify trends and find insights.
For example, I’ve looked at stock market returns by month to identify which months perform best/worst. Another example, among others, was analyzing how the best companies to work for have had excellent stock performance in the past. Whether stocks or other areas of personal finance, it’s often interesting to slice and dice data to to find some information that might be useful in some form or another.
In this case, I thought I’d look at some data from another angle, this one more just for fun. With the football postseason in high gear, I set out to identify trends related to the Super Bowl and stock market returns.
Objective
Are there any trends we can identify by looking at who won the Super Bowl in prior years, and how the stock market performed in those years?
Methodology
I first collected information on who participated in the big game since it first kicked off in 1967, and which team won or lost. Then, I pulled stock market data from each year since then, and calculated the annual return for the market. Specifically, I used the S&P 500 to analyze stock performance.
In looking at the data, the natural split seemed to be by conference: NFC or AFC. Organizing it by which team won the championship in any given year, I was able to pull together tables. Keep in mind that through the 2011 game, the NFC has won 24 championships, and the AFC (or old AFL, for the first few years of the title game) has been victorious 21 times.
Results
The first table shows the results by seasons the NFC won, and the second table does this for seasons the AFC won.
As can be seen, there is a notable difference in stock market returns based on which conference emerges with the victorious team. Clearly, there is a Super Bowl Effect – which might as well be referred to as an NFC Effect.
Years where the NFC wins the game end up with an average return of 11.06%. When the AFC wins the game, market returns average just 3.95%. Additionally, when the NFC wins, the stock market is more likely to have an overall positive year: 83%, vs 67% when the AFC wins.
Takeway: GO NFC! 🙂
OK, this is all in fun. Plus, the sample size isn’t that great in terms of total numbers. 45 years of data seems like a lot, but it’s not a huge data set. Besides, correlation doesn’t mean causation! But hey, if you don’t have any particular rooting interest in the game – and if your favorite team isn’t there (like me) – why not cheer for a potential winning outcome for the market!
My Questions for You
Have you heard of the Super Bowl impact on the stock market?
Who are you going to be pulling for in the Super Bowl?
Ha! This is great Squirrelers. If I’m cheering for my portfolio I clearly must support the NFC. There goes the Random Walk theory, it’s all about football.
Hunter – it’s an interesting phenomenon, if nothing else 🙂
Based on your table stats, I should root for the Patriots! Its tough since I am a former New Yorker. Today I heard Governor Christie refer to the Giants as NJ Giants. That is enough for me to root for the Patriots.
krantcents – well, Patriots are in the AFC so not sure about rooting for them:) Not that I’m from the area, but the team does have the New York name, right? So maybe they’re the team of both NJ and NY!
Very interesting. Had not heard about this Super Bowl effect.
Tushar – it’s interesting how data can take shape like this.
Amusing – proof there’s correlation without meaning hiding everywhere 🙂
I’m going to have to remember this, and use it to make that point in a subsequent post.
W – Yep, you got that right! Statistics can be used in many ways that look compelling. It’s most amusing when there’s correlation without clear causation 🙂
I’m hoping the election year effect outweighs the NFC effect – go Pats!
PK – good point, there’s that effect too!
Ha-ha, very funny! Don’t you just love statistics – anyone can ‘prove’ anything!
Marie – yep, statistics can be entertaining in that way….admittedly an egghead thing I just said, but it is what it is!
Very nice Squirrelers! Fun statistics! I hope the election year effect doesn’t mess with the superbowl effect this year! 🙂
Being from Indianapolis, I would be twice thrilled with a Giants win. First off, the Patriots lose and second, my portfolio will benefit.
Cashflowmantra – seems like a win-win for you 🙂 Should be interesting what happens with the Colts going forward by the way, we’ll see.
LOL that is a great analysis, great research, I still hope the AFC (Patriots) win but I guess that maybe I should close out my stocks before I watch the game