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Markowitz portfolio theory for soccer spread betting

Fitt, Alistair D. (2009) Markowitz portfolio theory for soccer spread betting IMA Journal of Management Mathematics, 20, (2), pp. 167-184. (doi:10.1093/imaman/dpn028).

Record type: Article


Soccer spread betting is analysed using standard probabilistic methods assuming that goals are scored in a match according to Poisson distributions with constant means. A number of different possible forms of ‘edge’ (betting advantage) is identified. It is shown how the centre spreads of the more common bets in the ‘bet universe’ may be calculated. A more general question is then addressed, namely, how a punter should invest if they take a view that the online bookmakers have fixed the goal means incorrectly or some other edge is in their favour. It is shown that a Markowitz portfolio theory framework may be set up in such cases. This leads to the definitions of an ‘efficient betting frontier’ and an ‘optimal bet portfolio’. Examples are used throughout to illustrate the theory that is developed.

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Published date: April 2009
Keywords: spread betting, portfolio theory, soccer betting, arbitrage, sports betting


Local EPrints ID: 65942
ISSN: 1471-678X
PURE UUID: adf60a33-ee55-450f-849a-1db4aaaa22fd

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Date deposited: 03 Apr 2009
Last modified: 19 Jul 2017 00:29

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Author: Alistair D. Fitt

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