The Sportfolio Strategists’ NFL Q3 Performance X-Ray Report
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The Sportfolio Strategists’ NFL Q3 Performance X-Ray Report

Brett M
12-12-2020

Brett Matthew, Zach James, and Corey Larson, lead strategists for BetKarma’s NFL managed sportfolios.

Intro:

We are 75% through the season; time for a recap of our managed sportfolio performance report. We'll walk you through a detailed attribution analysis of absolute performance on a standalone basis and relative performance vs. peer competitors in the marketplace. We understand there are various other managers out there who provide sports betting allocation as a service, so we think it is important to be as transparent as possible and provide straightforward comparison performance. We are confident that, over the course of the season, our managed Core Sportfolio will outperform both the market (the top 5 SuperContest consensus picks) and most, if not all, peer strategies, unequivically demonstrating the best bang for your buck are BetKarma strategies. As a reminder, in 2019, we did exactly that, outperforming the market and all peer competitors. 

Strategic Approach:

Before we dive into 2020 performance through the first half of the season, here is a refresher on the objective of our managed sportfolios strategies: BetKarma’s NFL managed sportfolios provide premium subscribers with a fully transparent, professionally managed, all-in-one betting solution, complete with built-in risk and bankroll management. Whether you’re a recreational bettor with limited time to conduct his own research on a weekly basis or an expert handicapper looking to diversify, complement, or supplement his core betting strategy, our product’s innovative structure, convenience, and baked-in intellectual capital are refreshing alternatives in the stale, dusty industry of sports betting advice. We offer both medium-risk and high-risk strategies, expressed via our Core and Aggresses Sportfolios, respectively.

Our Core Sportolio takes a max risk of 1-2% of bankroll per play and commits to making 5 picks per week, consisent with the constraints of competitors' SuperContest picks. There isn't a lot of auditable, verifiable pick track records out there; but comparing performance to SuperContest picks is as fair and comprehenisve as practically possible. This approach gives us a reasonable indication of competitors' highest-conviction picks and a benchmark with which to compare our performance. 

Our Aggressive Sportfolio is intended to amplify the return potential of our Core Sportfolio, allocating 2-4% to each pick, depending on level of conviction, complemeted by satelite allocations across exotic bets and live in-game trades that reflect our best thinking. Historical precedent suggests average risk exposure per week is between 10-15% of bankroll per week, reflecting a much less conservative risk appetite (not for the faint of heart). 

Performance v the Market:

After a sluggish start to the season, we have recovered admirably amidst an unprecedented season, performing in-line or outperforming the market almost every week since Q1. We end Week 13 delivering over 700 bips of excess return (>7% v the market, a general reflection of your standard sharper bettor), with our Core Sportfolio sitting up approximtaely 4% and the SuperContest Consensus bleeding 3.5% lower. Our performance in Weeks 9 and 11, when the market went 1-4 and 0-5, respectively, was largely responsible for driving the meaningful separation. Historically, when the market has been taken to the woodshed, we have captialized on the opportunity to deliver alpha and this season has been no exception.

 

Performance v. Competitors: 

We can see many of our competitors started the season much hotter than we did, an unusual set of events sincehistorically most of the season-long alpha generated by our strategies has been captured early-on, when spread accuracy is weakest and the sharpest bettors have juicy margin to find value. Usually, as the season wears on, the markets get more efficient, spread accuracy become tighter, opportunities for +EV disappear, and there is much less opportunity to isolate meaingfully mispriced risk. However, the virus has created an usual season with a lot more intangibles at play, which may be a material reason as to why our competitors have struggled since the close of Q1. 

At the end of Week 13, our Core Sportfolio is outperforming not only the market but all noteworthy competitor services. In fact, many of our competitors' performance moves together, implying a group-think mentality, which may not be surprising to many of you who hear the same betting narratives week-in/week-out across podcasts. This is where we deliver the most value-add - we are often off-market and see things across the betting board that most do not. We consider angles, factors, intangibles, and market dynamics that many in the space simply overlook, to their own (and your) detriment. We can quanitfy our unique visbility and "edge" over the competition by looking at correlation scores. In the below table, we can see that our Core Sportfolio allocations actually have NEGATIVE correlation to all competitors; implying that in most cases we are taking the other side of their trade or our picks are going in different directions where we perceive more value is to be had.

In all honesty, THIS is what you want when you considering who to listen to and whose advice to incorporate into your own handicapping analyses - fresh perspectives, outlooks, and viewpoints that are off-market. 

Lastly, we can see the explosive performance of our Aggressive Sportfolio, which is an absolute return strategy: meaning it is not intended to beat any specific benchmark since the risk-budget is unconstrained. The performance should be judged on its own merits, regardless of market or competitor dynamics. We expect Aggressive to outperform in any environment over the long-term, and that is exactly what we have delivered. The volatility in this strategy will be much more present, but we do not chase returns or ramp up risk to recklessly "get back to even". In fact, amidst our early season struggle, we recognized that we were actually taking too much risk, so CUT BACK on risk, increased our patience, acted more tactically to add alpha through live trades, and reduced exposure to -EV exotics. These adjustments stablized performance and put us in a position to put together a massive rally, rocketing up the charts over the next several weeks, currently sitting up 20+ units and returning in excess of 1500 bips. See detailed weekly attribution below, adjusted to show net units won per week, as opposed to individual plays, given the volume-to-risk of plays is less intuitive. 

If you have any questions, please do reach out. Thank you so much for your support!

Of course, to get access to our Core and Aggressive Sportfolios moving forward, please signup for a premium BetKarma subscription. Further, be sure to check out The Sports Trading Desk Podcast 📈on iTunes and Stitcher every week to hear our most salient handicaps, market insights, and Sportfolio performance breakdowns 📊. Follow Brett (@nonrandomalpha), Zach (@betkarmazach) and Corey (@pickswclars24) on Twitter 🐦 to catch their latest musings, actionable intel, and sardonic commentaries - you might even find a free premium play or two 🚀🚀🚀!


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