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Cover the Spread

Aapryl Insights

 

Cover the Spread

For NFL teams, the Super Bowl is the ultimate prize. However, only one team can take the Vince Lombardi Trophy. For the other 31 teams, they should benchmark their performance to expectations. For example, was your win-loss record better than predicted? Did the coach (manager) make the best decisions to prepare the team and place a plan to be successful? In football, odds makers explicitly let General Managers and teams know what they expect—odds.

In investing, benchmarks can be a measure of success. The problem with comparing portfolios to a stated benchmark is the portfolio and the benchmark may have distinct “style factors” (Value, Core, Defensive, Momentum, etc.). Even if a manager states their process is bottom-up, they still deliver performance influenced by factors.

Aapryl compares a portfolio to its “clone” or factor profile to distinguish skill from the “luck” of being in the factor currently in favor. In football this is comparable to the spread–the difference in points between teams to make the bet even. The Los Angeles Rams are a 3.5-point favorite over the Cincinnati Bengals. So, if the Bengals lose by 2 points, they are better than expected. The players and the coaches executed a plan that beat expectations.

If a portfolio manager beats their “factor clone” by 1%, then the skill added is 1%. This is a more effective and fair measure of a portfolio manager’s value add. Aapryl’s proprietary scoring allows manager research teams to determine which manager delivers persistent skill. Aapryl also uses machine learning (think artificial intelligence) to give analysts the probability a manager will outperform its peers over the next 3 years. That makes it easier to “bet” on the best of the best across your platform.

Wouldn’t it be nice to have odds like these three years in advance for your portfolio teams?

BTW-The Cincinnati Bengals were only supposed to win 6.5 games. Only the Detroit Lions and Houston Texans had a worse probability of winning the Super Bowl.

Super Bowl Odds and Season Wins

 

 

 

Team

Super Bowl

Season Wins

Actual

Kansas City Chiefs

450

12.5

12

Tampa Bay Buccaneers

600

11.5

13

Buffalo Bills

1100

11.5

11

Los Angeles Rams

1200

10.5

12

Baltimore Ravens

1400

10.5

8

Green Bay Packers

1400

10.5

13

San Francisco 49ers

1400

10.5

10

Cleveland Browns

1600

10.5

8

Tennessee Titans

2000

9.5

12

Seattle Seahawks

2500

9.5

7

New England Patriots

3000

9.5

10

Los Angeles Chargers

3000

9.5

9

Dallas Cowboys

3000

9.5

12

Indianapolis Colts

3500

8.5

9

Arizona Cardinals

3500

8.5

11

Miami Dolphins

4000

9.5

 

Minnesota Vikings

4000

9.5

 

New Orleans Saints

4000

9.5

 

Washington WFT

4000

8.5

 

Pittsburgh Steelers

5000

8.5

 

Denver Broncos

5000

8.5

 

Chicago Bears

6600

7.5

 

Las Vegas Raiders

8000

7.5

 

Atlanta Falcons

8000

7.5

 

New York Giants

8000

7.5

 

Carolina Panthers

8000

7.5

 

Philadelphia Eagles

10000

6.5

 

Jacksonville Jaguars

12500

6.5

 

New York Jets

15000

6.5

 

Cincinnati Bengals

15000

6.5

10

Detroit Lions

25000

5.5

 

Houston Texans

30000

4.5

 

Get the data  Created with Datawrapper

 

 

 

Super Bowl odds and season win totals from BetMGM

 

 

 

For more information on how Aapryl's proprietary methodologies can be used please contact us at info@aapryl.com.