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Aaron Brown

Here’s How the Quants Might Pick NCAA Basketball Winners

The same principles of factor investing can be applied to March Madness brackets. 

It’s time for some March Madness.

It’s time for some March Madness.

Photographer: Michael Heiman/Getty Images North America

This week marks the start of the NCAA’s 68-team, single-elimination tournament to select the men’s basketball team champion. There is a women’s version as well, but the men attract most of the betting interest. Workplaces across the country are creating “bracket pools” with entry fees from $1 to $10,000 where bettors try to predict the results.

I’m going to demonstrate a powerful quant technique — factor investing — to pick a winning NCAA bracket. Skip lower for the picks, but if you have patience, I’ll show interesting things along the way.