Two sides of dating

08 Oct

I tried to filter out teams who had played multiple games before their first game with a Vegas line. We often use standard deviation of a set of games from their lines to assess the accuracy of the lines.If the betting lines were getting more accurate with more information, one would expect the standard deviation of the lines to get smaller as the season went along.One particular set of markets of interest to sports fans and bettors are the sports betting markets of Las Vegas.Sports betting has become a multi-billion dollar industry, a way for shrewd bettors to make a living and squares to lose their money.To look at this aspect, I collected returning minutes data from 2008 to 2011, and sought correlations between returning minutes and the line miss for early season games.The correlation between returning minutes and line miss in each of the first 10 games of the season was at most -0.14, essentially zero.This is yet another example of the power of prediction markets and the wisdom of crowds.

Large observations are followed by more negative ones, and vice versa.19th century mathematician and genius Francis Galton, the man who invented the regression line (for which we at HSAC are forever indebted), once found himself at a country fair with a peculiar contest: who could guess the exact weight of a slaughtered and dressed cow?While no individual correctly guessed the exact weight, 1198 pounds, Galton noticed that the average of the 800 guesses was 1197 pounds–essentially perfect.In this case, it would mean that regardless of when the game is in the season, we would expect the accuracy to be around some mean standard deviation.The Dickey-Fuller Test for this series was significant at the 5% level (t-stat of -2.997), supporting the alternate hypothesis of stationarity.