Sports Betting As a New Asset Class: Can a Sports Trader Beat Hedge Fund Managers from 2010-2016?

9 Pages Posted: 14 Jun 2016  

Lovjit Thukral

Long Rock Capital

Pedro Vergel

Long Rock Capital

Date Written: June 13, 2016

Abstract

The authors investigate whether sports traders who systematically invest in sports betting strategies can outperform hedge fund managers and the S&P 500 from 1st January 2010 to 7th January 2016. The authors take a simple betting strategy based on Horse races in the UK and invest consistently on laying (betting on the event not to occur) the 4 favourite horses (with the lowest odds) in each race. They find the following:

(1) this type of horse racing strategy provide uncorrelated returns to the market;

(2) the strategy outperforms the Credit Suisse Hedge fund Index and S&P 500 Total returns on average for the last 6 years.

In conclusion, the authors find that Sports trading can provide an attractive option to investors as an alternative asset to generate excess returns which are uncorrelated to their existing portfolio.

Keywords: horse betting, contrarian, alternative beta, income, trading

JEL Classification: G11, Z20

Suggested Citation

Thukral, Lovjit and Vergel, Pedro, Sports Betting As a New Asset Class: Can a Sports Trader Beat Hedge Fund Managers from 2010-2016? (June 13, 2016). Available at SSRN: https://ssrn.com/abstract=2794937 or http://dx.doi.org/10.2139/ssrn.2794937

Lovjit Thukral (Contact Author)

Long Rock Capital ( email )

1 Cornhill
London, EC3V 3ND
United Kingdom

Pedro Vergel

Long Rock Capital ( email )

1 Cornhill
London, EC3V 3ND
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
706
rank
31,630
Abstract Views
2,382
PlumX