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Sports Sentiment and stock returns

Sports Sentiment and stock returns. Gregory Gay. Overview. Written by Alex Edmans , Diego Garcia, and Øyvind Norli. Discussion Mood Variable How sport outcomes affect investors decisions in the stock market International s occer is the primary focus. Mood Variable.

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Sports Sentiment and stock returns

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  1. Sports Sentiment and stock returns Gregory Gay

  2. Overview • Written by Alex Edmans, Diego Garcia, and ØyvindNorli • Discussion • Mood Variable • How sport outcomes affect investors decisions in the stock market • International soccer is the primary focus

  3. Mood Variable • Variable which takes into account the power sporting events have on people’s moods • Must Satisfy 3 Criteria • The variable must drive mood in a substantial and unambiguous way making its effect powerful enough to show up in asset prices • The variable must impact the mood of a large proportion of the population so it is likely to affect enough investors • The effect must be correlated across the majority of individuals within a country

  4. Sample Size • International Soccer Sample • Matches played by 39 countries • 1,162 games • 638 wins • 524 losses • Cricket, Rugby, Ice Hockey, and Basketball Sample • Matches played by 24 countries • 1,550 games • 905 wins • 645 losses

  5. Results of the Sample

  6. Soccer Effects

  7. Soccer Effects Continued

  8. Conclusion • There is a noticeable loss effect in the losing team’s country market • Soccer has a larger effect on markets than any other sport internationally

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