What are Implied Performance Dividends on IndexGain?

To date, all Football Index dividend reports have simply reported what the player has earned in the past.

But what if instead we could take a sideways look and work out what players could have expected to earn (given their score and the day type) for each score they generated?

We’ve given BuzzPro a little extra brain tonic to help it do just that. Before we get going, it’s worth remembering that this report is focused on match day dividends, it doesn’t consider media related dividends, so can’t help you determine when that next Pogba media generating haircut will be!

So how does this work exactly?

After all, any trader can view previous performance scores and get a general sense of the players likely chance of earning potential dividends in the future. The problem with this approach is it’s too simplistic and looks at the players score in isolation.

Our new report, Implied Dividends analyses all player scores, not just winning ones, by position and day type to determine the probability of each possible score winning on a given day type. It then uses that probability to calculate a weighted dividend.

Let’s have a look at an example:

If a player scored 25 points on a triple performance day, then it is expected that they would have a 0% chance of winning the 5p positional dividend. The implied dividend is therefore calculated at 0p.

If that same player scored 600 points on the same triple dividend performance day, it is expected they would have a 100% certainty of winning the 5p dividend. The implied dividend is therefore 5p.

Now imagine the player scored a more realistic yet still very commendable score of 230. They would then have a 50% expected chance of winning the 5p dividend, which translates into an implied dividend of (5p x 50%) 2.5p.

Distribution of weighted divs for the scores on a triple day

Buzz takes each player score for each match day and creates the implied dividend for each category – GK/DEF, MID, FWD and STAR. It then sums them to create a total implied dividend yield per player.

Lastly, it looks at actual dividends generated by each player and compares this against the Buzz generated implied dividend to see which players are overperforming or underperforming, or put in a simpler and perhaps more accurate way, which players have been lucky and which ones have been unlucky with dividends earned to date.

Anyone can only ever ride their good luck for so long, mean reversion is the theory that returns will eventually return to the long-run average of the underlying data.

Put another way, Las Vegas treats big winners with free room upgrades and other special treatment, all to keep them playing at the tables. Because the casinos know that eventually the punters luck will run out and they revert to mean and the house wins.

So just which players were the luckiest last season?

(sharp inhale of breath).

To do this we sort by ‘Diff’ column, descending on the Implied Future Dividends column as above.

We can then see that Donny van de Beek tops our list as luckiest FI player this season. Over 12 appearances so far, the implied dividends for van de Beek with the scores he earnt on each Matchday would be 1p. However, he has actually banked a very respectable 12p (11p more than his implied dividends).

Lucky indeed. 

Something important to note.  A lucky player does not necessarily mean they are a bad investment. 

As with actual divs, these implied divs should be considered hand in hand with price. A ‘lucky’ player who has received more actual divs than the implied divs (and likely also received trader price action), could still be an attractive option if they are relatively cheap.

An unlucky player may be unattractive even if they received those extra divs and hit the implied div target if they are currently overpriced. The sweet spot is those unlucky players with high implied dividends, that haven’t received price action due to being off the radar, and who are still low priced. This leads nicely onto Implied dividend yield.

What is the Implied Dividend Yield?

The report by default sorts players by best ‘Implied dividend yield’.  That is those players that pound for pound which (using the methodology set out above) will on average generate the best returns over the season.

Buzz has calculated that some have an implied performance yield greater than 10%.  To view these players or to find those that have been the unluckiest so far this season, then click here.

You will need to have Premium membership to view. Not upgraded yet? It takes just seconds to unlock our BuzzPro reports, additional forum channels and BuzzBot commands.

 

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