Super Bowl Indicator and Equity Markets: Correlation Not Causation

Abstract

The first discussion of the Super Bowl Indicator relating equity market performance to the league (conference) of the winner of the Super Bowl was in 1978. The intention was to show that correlation does not necessarily imply causation.  Various authors examined and discussed this relationship. The Super Bowl has been played for 50 years. This study examines the relationship between the Super Bowl winner’s classification and the movement of the equity market utilizing three equity market indexes for the entire period. Over the 50 years of the Super Bowl, the winner’s classification has correctly predicted the direction of at least one of the three indexes 86 percent of the time. It seems that the Super Bowl Indicator has maintained a rather close relationship with the equity market throughout the
game’s history. While correlation does not imply causation, it does provide interesting conversation and teaching points regarding the behavior of the equity markets.