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 languageEnglish
    Pages (from-to)267-274
    JournalFinance Research Letters
    Volume17
    Early online date31 Mar 2016
    DOIs
    Publication statusPublished - May 2016

    Keywords

    • market efficiency
    • Investor sentiment
    • soccer results
    • asset prices

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