Investor sentiment and sectoral stock returns: evidence from World Cup games

Giuliano Curatola; Michael Donadelli; Renatas Kizys; Max Riedel

doi:10.1016/j.frl.2016.03.023

Investor sentiment and sectoral stock returns: evidence from World Cup games

Giuliano Curatola, Michael Donadelli, Renatas Kizys, Max Riedel

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Abstract

It is well known that investor sentiment affects aggregate stock returns. We investigate the economic link between sport sentiment and US sectoral stock returns. We find that sport sentiment affects only the financial sector. We argue that this result might be explained by the high liquidity that makes the financial sector more attractive to foreign investors who in turn are more prone to sport sentiment than local investors in the US. Accordingly, an arbitrageur can build a profitable trading strategy by selling short the financial sector during the FIFA World cup periods and buying it back afterwards.

Original language	English
Pages (from-to)	267-274
Journal	Finance Research Letters
Volume	17
Early online date	31 Mar 2016
DOIs	https://doi.org/10.1016/j.frl.2016.03.023
Publication status	Published - May 2016

Keywords

market efficiency
Investor sentiment
soccer results
asset prices

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10.1016/j.frl.2016.03.023

KIZYS_2016_cright_FRL_Investor sentiment and sectoral stock returnsAccepted author manuscript (Post-print), 501 KBLicence: CC BY-NC-ND

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title = "Investor sentiment and sectoral stock returns: evidence from World Cup games",

abstract = "It is well known that investor sentiment affects aggregate stock returns. We investigate the economic link between sport sentiment and US sectoral stock returns. We find that sport sentiment affects only the financial sector. We argue that this result might be explained by the high liquidity that makes the financial sector more attractive to foreign investors who in turn are more prone to sport sentiment than local investors in the US. Accordingly, an arbitrageur can build a profitable trading strategy by selling short the financial sector during the FIFA World cup periods and buying it back afterwards. ",

keywords = "market efficiency, Investor sentiment, soccer results, asset prices",

author = "Giuliano Curatola and Michael Donadelli and Renatas Kizys and Max Riedel",

note = "EMBARGO 12 MTHS NOTICE: this is the author{\textquoteright}s version of a work that was accepted for publication in Finance Research Letters. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Finance Research Letters, VOL( ISSUE), (2016), DOI: 10.1016/j.frl.2016.03.023 ",

year = "2016",

month = may,

doi = "10.1016/j.frl.2016.03.023",

language = "English",

volume = "17",

pages = "267--274",

journal = "Finance Research Letters",

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T2 - evidence from World Cup games

AU - Curatola, Giuliano

AU - Donadelli, Michael

AU - Kizys, Renatas

AU - Riedel, Max

N1 - EMBARGO 12 MTHS NOTICE: this is the author’s version of a work that was accepted for publication in Finance Research Letters. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Finance Research Letters, VOL( ISSUE), (2016), DOI: 10.1016/j.frl.2016.03.023

PY - 2016/5

Y1 - 2016/5

N2 - It is well known that investor sentiment affects aggregate stock returns. We investigate the economic link between sport sentiment and US sectoral stock returns. We find that sport sentiment affects only the financial sector. We argue that this result might be explained by the high liquidity that makes the financial sector more attractive to foreign investors who in turn are more prone to sport sentiment than local investors in the US. Accordingly, an arbitrageur can build a profitable trading strategy by selling short the financial sector during the FIFA World cup periods and buying it back afterwards.

AB - It is well known that investor sentiment affects aggregate stock returns. We investigate the economic link between sport sentiment and US sectoral stock returns. We find that sport sentiment affects only the financial sector. We argue that this result might be explained by the high liquidity that makes the financial sector more attractive to foreign investors who in turn are more prone to sport sentiment than local investors in the US. Accordingly, an arbitrageur can build a profitable trading strategy by selling short the financial sector during the FIFA World cup periods and buying it back afterwards.

KW - market efficiency

KW - Investor sentiment

KW - soccer results

KW - asset prices

U2 - 10.1016/j.frl.2016.03.023

DO - 10.1016/j.frl.2016.03.023

M3 - Article

SN - 1544-6123

VL - 17

SP - 267

EP - 274

JO - Finance Research Letters

JF - Finance Research Letters

ER -

Investor sentiment and sectoral stock returns: evidence from World Cup games

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Keywords

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