What Would Wall Street Do: Week 11 NFL Power Rankings

So here in Boxland, there are slight tweaks that happen on a constant basis.

As of today, there is an ever so slight tweak to the Beta algorithm that had a minor impact on double down bets (went from winning 15X more in the last two year span to 17X more on the games on which bets are doubled), and had virtually no other effect.

I will repost the game rankings with updated Vegas spreads later today, but for now we'll take a look at the Financial Rankings.

Some notes on how these are determined and what they mean, in case you're new to this blog or these metrics:

1) Sharpe Ratio—a measure of risk adjusted performance in finance, I define performance here as the moving average of points scored per game. This is the closest to "pundit" rankings out of the financials, as it is a purely point driven derivative.

2) Beta—a measure of volatility in finance. I am using a bastardized version of DVOA, the genius work of the team at Football Outsiders (a MUST read). Determining this has, with some success, measured how consistently teams have performed. It does NOT measure how good the team is—a team can be consistently BAD and therefore have "low volatility".

3) Alpha—another measure of risk adjusted performance, but uses Beta in its algorithm, and therefore uses DVOA rather than a pure point performance. In a way, this measures "bang for your buck" in terms of a team's ability to "outperform" it's statistics or expected performance. Usually has the most interesting results.

So with that said, here are the rankings (organized by team, not by rank):

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

What pops out at me is the Alpha score—according to Alpha, CIN is the number five overall team. It's hard for me to believe that CIN would provide so much bang for your buck, but if nothing else, they have consistently scored this season. And more surprising to me is that NE is actually SECOND in SOMETHING this year. I think it's actually just a function of competition—DAL has none in the NFC, and NE has...well, none, but at least more than DAL.

The beta rankings are close to expected, though I'm a bit surprised by HOU. Despite QB issues and Andre Johnson being out, they've been very consistent this year. I expect them to drop with the return of Schaub and Johnson this week, as it may throw off the average.

On the bottom half, I'm mildly shocked at the number of top tier teams—CLE, DAL, DET, IND (after the last two weeks), JAC, NO, and NYG—all playoff contenders or locks, all playing with some inconsistencies. This can be attributed in part to injuries (IND, JAC), and in part to inability to put together back to back weeks (NO, NYG, DET). DAL and CLE are mysteries to me, since DAL seems to be pretty steady and CLE has been playing at such a high level. My best guess is that the dropoff in points on DAL part, which has been steady over the season, and a terrible week one performance from CLE, is keeping them down. I may have to add a parameter that weights current weeks greater than early weeks, but with the sample size in a season already so small, I'm hesitant to do so.

A note if you're betting this week: the Alpha and Sharpe are nice tools for moneyline bets. The Beta is a nice overall tool if you're worried about your team's consistency (or as Mad Capper puts it, "multiple personality syndrome"). As noted, some top tier teams all rank in the bottom half of Beta, indicating that a bet on any of them could lead to trouble depending on which version of the team shows up.

Look out tomorrow for the updated game rankings and best bets.