Thursday, August 30, 2007

Sagarin vs. Vegas v2.0

During the bowl season last year, I wanted to see how we would do if we used Jeff Sagarin's ratings to help us make "investments" in the college football market.

Following Sagarin's "advice" you would have wagered on 32 games and gone 18-14 winning a grand total of $260. You would have achieved a return of 7.386% on an "investment" of $3,520 in 3 weeks.

I had a lot of fun doing it so I decided renew the exercise for the regular season. I will pre-select 5 games each week and place an imaginary wager of $110 (to win $100) on the team that the system suggests.

A few notes on the system:

I am using Sagarin's current "Predictor" ratings. The way it works according to Sagarin is:

To make predictions for upcoming games, simply compare the RATINGS of the teams in question and allow an ADDITIONAL 3 points for the home team. Thus, for example, a HOME team with a rating of 92 would be favored by 5 points over a VISITING team having a rating of 90. Or a VISITING team with a rating of 89 would be favored by 7 points over a HOME team having a rating of 79.

NOTE: Use whatever home advantage is listed in the output below. In the example just above, a home edge of 3 was shown for illustrative purposes. The home edge will vary during the season.
The bit about about home advantage is new to the exercise since the bowl games were played in what are supposed to be neutral venues.

Another thing to keep in mind is that Sagarin's ratings are supposed to become more accurate as the season progresses and a relationship is established between teams relative to Strength of Schedule (SoS).

Remember, 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:
  1. 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.
  2. 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.
  3. 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.
To see the latest picks and results, click this link.

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