Written by Miikka Paakkinen of the ScoreMetrics Lab
We’re only a few days removed from the Kansas City Chiefs winning Super Bowl 54, but the ScoreMetrics labs is already looking into the future. More specifically, we have our eyes on next season’s NFL futures market and the possible Super Bowl winner.
If you’re new to futures investments in sports, take a look at this newsletter article that we published back in January to learn more.
In today’s article we will inform you of the current odds for Super Bowl LV. We’ll also look at the past performance of investing in the preseason favorite and play around with the idea of one diversified investment case.
Read on to see what we discovered.
Super Bowl 55 odds
Here’s what the Caesars Sportsbook is offering us for the Super Bowl LV winner:
|Kansas City Chiefs||+600|
|San Francisco 49ers||+900|
|New Orleans Saints||+1200|
|New England Patriots||+1400|
|Green Bay Packers||+1800|
|Los Angeles Rams||+2800|
|Los Angeles Chargers||+3000|
|Tampa Bay Buccaneers||+5000|
|New York Jets||+7500|
|New York Giants||+10000|
These odds are from February the 5th, 2020.
Fresh off of winning in Miami, the Kansas City Chiefs are currently the favorite to repeat the deed next year. But is it a good idea to put your money down on the favorite?
The ScoreMetrics labs discovered that during the last ten seasons, the bookmakers’ preseason favorite has gone on to win the Super Bowl only twice (the New England Patriots in 2016 and 2018). It’s safe to say that investing in just the favorite is a risky affair.
Still, the Patriots were +600 before the season on both of those occasions, so in that sense you could make a case for putting your money on the favorite. An investment of $1k per year on the favorite would have been lost eight times, but those two winning years would have returned a total of $14k, leaving a profit of $4k.
Most years though, you’re looking at lower odds than +600 for the bookmakers’ favorite.
The Chiefs are now at that number, so is this a good investment opportunity? We’ll let you decide, but this isn’t quite enough to fit the ScoreMetrics criteria for a solid investment.
How about diversifying your investments?
Now, let’s try a little game of diversification and do some backtesting on an investment hypothesis. What if we would invest an equal amount in the top three preseason favorites? What would that have looked like if we’d done that for the past ten seasons?
In this scenario, we would have had a winning investment in five of the last ten seasons:
|2019||Kansas City Chiefs||+600|
|2018||New England Patriots||+600|
|2016||New England Patriots||+600|
|2014||New England Patriots||+650|
Would this have been a winner for us when we add it all up? Let’s again say that we put down $1k on each of our investments. Three investments per season makes $3k per year, and ten seasons leaves the total investment at $30k.
With the odds listed above, our total returns from the winning investments would have been at $35.7k. So, we’re looking at a 20% ROI. That’s ok but obviously being down $3k in half of the seasons is hard and calls for some long-term commitment and bankroll management.
Good investment? Maybe not, but we’d need to dig deeper and crunch the numbers some more before making conclusions.
Keep in mind as well that the historical odds used here are from just before the season started. The odds we’re looking at now for Super Bowl 55 are a reflection of what bookmakers currently think of the teams. They might look different after all the offseason moves have been made. And they obviously change throughout the season.
So, what makes for a good investment then? To learn how to build your own sports investment systems, we always recommend John Todora’s new book, “Zero Correlation Investing – The Score Metrics Secret”, which is on sale for a limited time now. Go get yours before the deal runs out!
The ScoreMetrics Lab is the engine that runs the Sports Trading System operation, consisting of a team of researchers and writers who are constantly testing and retesting algorithms. They work hand in hand with our Head Trader and Creator of ScoreMetrics, John Todora to help find new breakthroughs and develop new systems.