Free alpha alert: Betting on who’s going to win World Cup games isn’t the only way to bet on the tournament. Stock-market volatility in country-specific indexes tends to spike after their national teams play, according to a new analysis from data-modeling firm Polybridge. A country’s stock market is about 15% more volatile the day after its national team plays a World Cup match and stays that way for about a week, tracking data going back to 1998 shows. Prices were as likely to rise as they were to fall, but they bounced around a lot more — profits that could be captured by bets on volatility for indexes in, for example, Brazil and Germany.
“We can’t say exactly why, but the best bet is increased attention,” Kiran Karra, a research engineer at Polybridge, tells Semafor. That would explain another of the company’s findings, an uptick in country-specific exports after a deep run into the tournament. (Polybridge projects a 2.7% rise in tourism to Cape Verde next year.)
Or maybe it’s the opposite: Hungover traders are slower to catch falling knives.
