Friday, December 29, 2006

Sagarin versus Vegas, Part 1

Note: the post below has been updated to account for a transcription error. You will see strike through text where the corrections have been made.

I wanted to see how we would do if we used Sagarin's "Predictor" ratings to help us make "investments" in the college football market. I'm having a hard time finding the spreads of the games already played so I have decided to start right now with the 20 remaining Bowl games.

For the purposes of this exercise I am using Sagarin's current "Predictor" ratings that include games December 16th. According to Sagarin you subtract the predictor of the lower ranked team from the predictor of the higher ranked team and that gives you a projected margin of victory (MoV).

The purpose here is to find out what happens when we take Sagarin's advice and try to apply it in Vegas. The point spreads I'm using are from Pinnacle Sports and are published here.

There's only 3 possible scenarios for each game we analyze.

The first scenario is the easiest to understand. That's when Sagarin and Vegas disagree on who the favorite is. In this case Sagarin would suggest taking his favorite since that's the Vegas underdog and is getting points. 3 of the upcoming games meet this criteria.

The second scenario is when Sagarin and Vegas agree on who the favorite is but Sagarin believes the Margin of victory will be more than Vegas. In this case you select the favorite since Vegas will require you to give less points than Sagarin believes the MoV will be. 9 10 of the upcoming games meet this criteria.

The third scenario is where Sagarin and Vegas agree on who the favorite is but Sagarin believes the MoV will be smaller than the Vegas spread. Here you would take the underdog to cover the spread that Sagarin believes is too high. 8 7 of the upcoming games meet this criteria.

I am going to throw out the Tennessee/Penn State game because the Vegas spread and Sagarin's projected MoV are within half a point of each other and thus there is no clear direction on which side to bet (although if you were going to be strict about it you would take Tennessee).

Below is a spreadsheet that shows the games, the Sagarin Spreads and the Vegas spreads as well as a column showing who you would bet on if you were to use Sagarin's rankings as your sole guide. We'll assume that we're betting $100 on each game ($110 investment).

I'll be checking back in with updates as the rest of Bowl season unfolds.

Note: There is an error in the spreadsheet. The "Sagarin Spread" was actually 13.93. The result of the correction is that Clemson and not Kentucky should be the play on this game.

1 comment:

Paul said...

I for one welcome our new algorithmic overlords.