In tribute of the upcoming qualifying games for the European Championship in football (soccer if you are American), which will be held in 1 week, here is the answer: Yes there is a connection. In what way? Remarkably, if the match is important, the returns of losing team’s stock market, on average, is lower! I don’t recall if the winning team’s market, on average, has higher returns though.
Does this mean you should go around short selling if you think your team would lose? Probably not. The profits, with commission, won’t be worth the effort according to the Efficient Market Hypothesis. But after all, it is still an hypothesis and it is worth testing on historical data in your country to see how much, on average, the returns decrease. But hurry though, anomalies like these tend to fade pretty quickly
If we are in the topic of anomalies, there was another interesting study done which found that on average, there were higher returns in the stock market in sunny days than rainy days. It’s interesting to see how mood can affect so dramatically returns in the stock market.
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