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. (C) 2016 Elsevier Inc. All rights reserved.

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

DONADELLI, M.;RIEDEL, M.
2016-01-01

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. (C) 2016 Elsevier Inc. All rights reserved.
2016
17
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10278/3703175
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