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Palisade Utilized in Award-Winning Sports Analytics Research
Baseball Wagering Model Powered by DecisionTools Suite Wins Business of Sports Track, Named Third Place Overall at the Prestigious 2015 MIT Sloan Sports Analytics Conference

Ithaca, New York 30 March 2015 —Palisade Corporation, a leader in decision and risk analysis solutions, has been recognized by DePaul University professor Clayton Graham for its contribution to his research submission, “Diamonds on the Line: Profits through Investment Gaming,” at the Ninth Annual MIT Sloan Sports Analytics Conference.


Video of Clay Graham's presentation

The paper, which topped the “Business of Sports” track and earned third place overall, utilized Palisade’s DecisionTools Suite to create an accurate baseball investment model to calculate the probability of winning individual games and the economic consequences of each wager based against each game’s betting line. Additionally, the research sought to determine the optimal bet size, based upon the risk tolerances of the investor.

Creating the model required the following five steps:

  1. Building a predictive function that determined the probability of winning each game
  2. Defining the betting line of each game, which determines the payoff or loss
  3. Establishing an economic relationship between the production function and betting line
  4. Creating a risk-return based investment function compatible with the production model
  5. Quantifying the results model

Clayton Graham being interviewed by Jody Avirgan for FiveThirtyEight, the statistics-minded ESPN website founded by statistician Nate Silver.

“Palisade’s DecisionTools Suite was invaluable to the success of this lengthy project, as it quickly and easily computed the myriad statistical scenarios,” said Graham. “Baseball has a seemingly infinite set of possibilities with each at-bat, and the intricacies of determining what may happen would be impossible to determine manually, with any degree of expediency. DecisionTools Suite is also very easy to use and intuitive because it operates in Microsoft Excel. I can say, without hesitation, that this project would not have been possible without DecisionTools Suite and the technical support Palisade offers.”

Once the model was complete, an initial bankroll of $1,000 was used to place wagers (about two per day) on Major League Baseball games beginning on June 16, 2014 and through the conclusion of the World Series on October 29, 2014. The amount wagered on each game was determined by the analysis, and 75 percent of the time, games didn’t offer enough statistical edge to even warrant a wager. Key results included:

  • 68 percent of wagers resulted in wins,
  • 35 percent return on daily at risk capital,
  • Initial $1,000 investment grew more than 1,400 percent during the season.

“While this paper is not a typical utilization of DecisionTools Suite, the research clearly shows the power and accuracy of the software, and we are thrilled that our solution played a part in achieving such a prestigious honor,” said Randy Heffernan, Vice President, Palisade. “It is especially gratifying to see Professor Graham’s tireless work being recognized at this level, as he has been a Palisade customer and champion for more than three decades.”

» Text of full paper

» More on the DecisionTools Suite

About Palisade
Palisade Corporation is a software developer and solution provider that produces decision support tools for professionals in many industry sectors. The company was founded in 1984, and at present more than 150,000 people use Palisade’s software in fields that range from finance to oil and mineral exploration, real estate to heavy manufacturing and pharmaceuticals to aerospace. Its software is used by more than 90 percent of Fortune Global 500 companies. Sample clients include Royal Dutch Shell, Petrobras, Procter & Gamble, PEMEX, China Minmetals, Mitsubishi, Merck, Unilever, Allianz, Total, Raytheon and BHP Billiton, as well as top business schools around the world.



For more information, contact:

Randy Heffernan
CEO
Palisade
Tel: +1 607-277-8000
Fax: +1 607-277-8001
rheffernan@palisade.com


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