INVESTOR SENTIMENT AND STOCK RETURNS

This paper investigates the effect of changes in investor sentiment, caused by soccer results, on stock returns. According to the behavioral finance framework, investors are not fully rational, and their mood influences the way they make decisions on the stock market. If soccer results affect investor sentiment, this effect should be reflected in stock prices the first trading day after a match. I study the soccer results of 28 countries during 10 European Championships, but I do not find a relation between soccer results and stock prices, and these results seem to be robust to methodological changes.