Wells Fargo Quants Tell You How to Bet on the Super Bowl

  • Take Atlanta plus three points over the Patriots, say analysts
  • Firm has called 10 of the last 13 winners against the spread

Do you trust Wall Street’s geniuses to predict the ebbs and flows of the financial markets? How about something even more important - like the outcome of Sunday’s Super Bowl?

Wells Fargo Asset Management’s Analytic Investors LLC, the Wall Street quant shop that has accurately predicted 10 of the last 13 Super Bowls against the point spread, says take the Atlanta Falcons and the three points over Tom Brady, Bill Belichick and the New England Patriots.

“This Pats/Falcons Game could make history – if the Patriots win, it would be the first time a QB and a coach/QB combo has won five titles, which doesn’t bode well for the Falcons,” according to the study released Thursday. “However, from a value standpoint, our model would argue to the contrary.”

Analytic Investors applies the same tools it uses as a money manager to evaluate professional football teams. At the core is what it calls the “NFL Alpha,” which is a calculation of each club’s investment return versus the betting odds.

In sports betting, “returns” are a function of whether a team won compared to its chances of winning as defined by Las Vegas odds makers. The higher the Alpha, the better the performance against the odds. This season’s highest-Alpha team, the Dallas Cowboys, returned 51 percent to bettors. The lowest team, the Cleveland Browns, lost 83 percent for bettors.

But there’s a catch: The teams with high NFL Alphas are the ones you should bet against. The reason? Mean reversion. Since the point spread is designed to level competition on the field, teams that have been outperforming and underperforming against those odds eventually should come back toward the norm.

The two teams facing off this year both have high Alphas. The Patriots are third in the NFL, the Falcons are seventh. So both have done well for bettors this year. The question is, which will come out on top on Sunday.

“With a relatively lower Alpha, the Atlanta Falcons are our pick,” Analytic Investors wrote. “And no, there isn’t any anti-Spygate/Deflategate bias factored into our prediction. Although, it would be fascinating to see (NFL commissioner Roger) Goodell forced into handing the Lombardi Trophy over to his nemesis Robert Kraft, wouldn’t it?”

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