Friday, 22 August 2014

Euro Underlying Results

One of the outstanding pieces of work I had this Summer was to pull together a tracking sheet to monitor the underlying results for the Euro leagues. I’d sort of been doing it in the background but it was only earlier this week that I got on top of the email exchanges with subscribers and given the fact my baby hasn’t arrived yet, I thought it was a good opportunity to complete this piece of work and do a quick blog post on it.

As you will remember, it was only last season that I started tracking the underlying results of the UK leagues closely. I’ve always been acutely aware of the fact that my system results are heavily influenced by what happens to the underlying results but I didn’t ever feel the need to pay too much attention as at the end of the day, I can’t change the underlying results. However, what I found last season was that without knowing exactly how the underlying results were behaving in the short-term, it was impossible to explain some of the variance I was seeing in the results on a monthly basis.  I set up a little tracking sheet to monitor the results on a monthly basis and it really helped me with the mental side when I was experiencing some of the ups and downs.

So, I’ve now completed the same piece of work for the Euro leagues.  

Being honest, I’d looked at something like this before in early 2010 before I built the first UK algorithms as back in the day, my intention was to build Euro ratings first rather than UK ratings. However, my first few attempts at building Euro ratings weren’t too successful as I couldn’t find a way to create an edge on Aways (looking at Draws hadn’t even been a consideration) and when I looked at the underlying results, I could understand why. Basically, from 2006/07 to 2009/10, backing all Homes blindly was pretty near break-even in these top 4 Euro leagues (Italy, France, Spain & Germany). Backing Aways was heavily loss making and therefore, trying to find an edge with Aways was very tough.

Anyway, roll forward 4 seasons and now I have two seasons proofed results behind me in the Euro leagues for Homes/Aways (not the greatest results but a foundation to build from) and next season will see the first season of Euro Draw bets. Therefore, it seems like it was worth investing the necessarily time to create something similar to what I have for the UK bets.  I have data going back to 2006/07 but similar to the UK underlying results, I’m going to concentrate on the last 4 seasons. The further back you go, the less competitive the prices are and therefore, the results look a bit different to the most recent years.

So, here’s the results for the last 4 seasons:

A really interesting picture and considering I’m about to embark on new Euro Draw systems, let’s just say my confidence is a little lower having seen these underlying results!

I think the first comment is the fact that if following Homes only, you should struggle to make a loss in these Euro leagues long-term based on these results. Many of my blog readers will be aware of other tipster services that specialise in Homes in Euro leagues and looking at the Underlying results, I can see why they have gone down this approach.  

Interestingly, in my first season of Euro ratings, my Home bets were terrible and therefore, I think this highlights how weak the ratings were I built. I knew that of course and that’s why I binned the ratings and started again with new Euro ratings last season. Also probably explains why I ended up with such a high % of Home bets on my rating algorithms now compared to what I had before. If you are relying on Aways in these leagues to make a profit, you will struggle I think long-term. 

Looking at Aways, it is a tough place to make money in these leagues and we’re looking at a loss of around 3.9% over the last 4 seasons.

However, compared to the Draws, a loss of 3.9% doesn’t look too bad! The Draws have lost 6.4% over the last 4 seasons, last season lost 8.5% and the 2010/11 season lost 10.5%. Not exactly an easy place to make money!

If I look at the month by month view, we see lots of months where backing all Homes is profitable and considering this is the first time I’ve really looked at this, I find it very interesting.

20 winning months from 37 if backing all Home bets. Amazing really but then again, given the overall results, shouldn’t be too surprised but it shows how consistent this method is.

12 winning months from 37 for Draw bets shows the difficulties playing in this space. Only 2 winning months in the last 12 shows how difficult it has been recently in these leagues if backing Draws.

16 winning months from 37 for Away bets and I was surprised it was as high as this given the issues Aways have generally.

Similar to what I do with the UK underlying results, I’ll be keeping tabs on these Euro results every month and when writing monthly reviews, I’ll try to use what I have seen to hopefully understand some of the performance issues we’re seeing on a monthly basis.

So, does the above change my thinking at all about the Euro Systems and Euro Draw Systems?

In terms of the Euro systems, I think last season was a pretty easy season for backing Homes/Aways and therefore, maybe I’m not too surprised that my Euro systems made a decent profit. I guess if I go back another season, it wasn’t that much more difficult and my ratings bombed badly, so I think that highlights deficiencies in my ratings for the first season which is what I concluded myself based on the poor performance.  I said at the end of last season that I still thought my Euro systems had a lot to prove and I think the above backs up my thinking. Let’s see how they do this season.

In terms of the Euro Draw systems, I think the above has opened my eyes to how tough this place is to make money. Being honest, having seen Cassini’s results over the last two seasons, I realised it wasn’t exactly an easy place to make a profit but I’m not sure I’ve seen too many tougher groups of data to try to find a betting angle over the last few years.

Last season, backing Draws in UK leagues was very tough with an ROI of -5%. This was the worst ROI since season 2007/08 for these leagues (also the lowest strike rate since then) and therefore, I was overly excited about how my Draw systems had outperformed the underlying return. For 3 of the last 4 seasons, the Euro Leagues have had a worse ROI than this!

Unless conditions get a bit easier for Draw backers (higher strike rate), I would struggle to believe that my ratings could make a profit next season. It’s not impossible (my UK Draw systems did it last season) but experience tells me that when the underlying results are tough, making a profit from a very high number of bets is just as tough. The odd system with lower turnover can do well but the higher turnover systems may struggle if the losses are as bad as 3 of the last 4 seasons. 

Of course, as I have pointed out before, tracking underlying results is great for explaining what has happened historically but in terms of explaining what may happen next, they are about as useful as a chocolate teapot. Some will say the Euro leagues are due more draws after the last few seasons whereas other will say that the trend has changed and the market hasn’t caught up and therefore, there is no value in draw bets in these leagues unless the strike rate increases.  Let’s see what happens this season!

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