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What Would Wall Street Do: The NFL Gambling Power Ranks

Matt MoscardiAnalyst IDecember 5, 2007

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The Oakland Raiders are 4-8. They are in the woeful AFC West. And they are in the top half of teams in the league. At least so say the Gambling Rankings, my new moniker for the financial rankings. Here are the overall rankings:

The Gamblers'
Power Rankings
1NE 
2DAL+1
3IND-1
4PIT+1
5GB-1
6SEA 
7NYG 
8SD+3
9MIN+6
10TB+2
11CLE-3
12JAC-2
13DET-4
14ARI+2
15OAK+3
16PHI-2
17CIN-4
18HOU-1
19NO 
20CAR+2
21WAS-1
22TEN+1
23CHI-2
24NYJ+5
25BUF 
26DEN-2
27STL+3
28BAL-2
29KC-2
30SF-2
31ATL 
32MIA 

So the big surprises: Oakland in the top ten, Tennessee on the bottom, and Jacksonville is almost mediocre. Wha?

First, it's important to understand how the rankings are made. These rankings measure a combination of Sharpe and alpha. After last week's Sharpe tweaks, these metrics are derived as follows:

  • Sharpe measures how much a team outperforms its expected spread, and how consistently it does so. Basically, it is a measure of how much better a team is than it's statistics. This is weighted as 80% of the rankings.
  • Alpha measures a team's points scored to statistical score ratio, and the consistent level of that ratio. It indicates that, while on paper a team may seem good, their week to week output may not be consistently high. This is weighted as 20% of the rankings.
It is important to remember that a team is HURT by performing outside expectations.  This is why you see a drop in Baltimore's rank despite a stellar performance on Monday night.  Statistically, Jacksonville was expected to not only cover against Indy (NFL-What_Would_Wall_Street_Do_NFL_Week_13_Best_Bets-291107">see Week 13's Best Bets article), but to WIN outright.  Which explains the drop in their rank.  When you combine consistency with expected performance, you get a very different landscape of the league.
Oakland is the perfect example. On paper, they look pretty terrible:

OFFENSEDEFENSE
PTSPTS
19.521.7
(21st)(17th)
YDSYDS
308.3334.1
(21st)(19th)
PASS YDSPASS YDS
173.3186.1
(30th)(5th)
RUSH YDSRUSH YDS
135148
(4th)(30th)

(stats courtesy of NFL.com)
But no matter what the NFL says, how does Oakland play against it's own expectations?  Pretty freakin' well, actually.  So freakin' well, it's in the top 10 of alpha and beta, and top half of sharpe (see below).  So what do we expect from Oakland?  Losses virtually every week.  And the Box is 9 - 3 (yes, NINE AND THREE) picking Oakland (for or against).  So are they bad?  Yes.  Are they predictable?  Hell yes.  Is that good for the money?  Abso-freakin'-lutely.
 SharpeAlphaBeta
TeamRankRankRank
ARI121320
ATL303231
BAL29199
BUF253019
CAR23125
CHI202932
CIN2157
CLE14726
DAL311
DEN272518
DET1764
GB51121
HOU181014
IND233
JAC72727
KC283130
MIA321723
MIN101511
NE1212
NO162429
NYG1342
NYJ241417
OAK15910
PHI112225
PIT486
SD91828
SEA61613
SF31238
STL262815
TB82624
TEN222122
WAS192016

In fact, they make the top 10 for Alpha and Beta (volatility)!
 
So while I wait to list the best bets later today, take a look at this week's rankings and let me know if you see anything worth discussing.
 
 
For more information and deeper analysis, please see Mental Handicap, the hedge fund of NFL betting.
 

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