Investor Sentiment and Sectoral Stock Returns: Evidence from World Cup Games

Giuliano Curatola, Michael Donadelli, Renatas Kizys and Max Riedel

Finance Research Letters, 2016, vol. 17, issue C, 267-274

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: Investor sentiment; soccer results; asset prices; market efficiency (search for similar items in EconPapers)
JEL-codes: A12 G14 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:17:y:2016:i:c:p:267-274

DOI: 10.1016/j.frl.2016.03.023

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