NEW YORK (Reuters) - Forget the oddsmakers. What does the smart money on Wall Street say about the Super Bowl this Sunday? Green Bay over Pittsburgh.
Using a model that assigns teams in the National Football League a value for outperforming market expectations -- what investors call alpha -- the Green Bay Packers will beat the Pittsburgh Steelers because the Packers' alpha is lower. That is, they exceeded expectations less frequently than the Steelers during the season.
"Over the last decade, the market has systematically underestimated the lower-alpha teams' probability of victory in the Super Bowl," said Analytic Investors LLC of Los Angeles, which oversees $7.3 billion in assets as of September 30.
According to their metric, Green Bay's alpha is 1.4 percent, while the Steelers' is 28.7 percent. The Steelers came out ahead of expectations more often, and therefore a bettor would have done better on that squad through the year.
However, Analytic Investors points out that there is often a reversion to the mean in the post-season -- those that outperform all year eventually fall short. By this calculus, the firm says Green Bay is undervalued and therefore the smart money should bet on the Packers.
The firm has predicted seven consecutive Super Bowl winners and eight of the past 10.
(Reporting by Herbert Lash; Editing by Kenneth Barry)