There's a new study out about how the success of sports teams affect the stock performance of local companies, which may take on some relevance now that we know that the Seahawks and Patriots will be meeting in the Super Bowl. The researchers found a strong correlation between stock prices of local companies and the performance of NFL, MLB, NBA and NHL teams.
In other words, if the local team wins, the local stocks win too. They argue that it's possible to create a portfolio based on this knowledge that would increase returns from 0.08 percent to 0.13 percent per week.
The effect appears to be caused by simple sentiment: Exuberance over the area sports team tends to spread excitement in lots of different directions. The authors say the effect washes out about three years after the success, so any effect from the Giants' victory in Super Bowl XLVI is just about done by now.
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