Resumen de The Impact of Covid-19 on Football Club Stock Integration and Portfolio Diversification
Ali Aboudi Nehme, Anwar Mustafa Hasan, Akram Salim H. Al Janabi, Ghazwan Ayad Khalid Al Shiblawi, Mazen Dawood Salman, Hala Ayyed Hadi, Mohammed Faez Hasan, Ahmed Hafedh Hameed Al-taie, Bushra Fadhil Khudhair Al taie, Sallama Ibrahim Ali, Nawfal Ghazi Zghair, Rabab Wahhab Maseer, Hakeem Hammood Flayyih, Mustafa Khudhair Hussein, Ali H. Al-Saedi, Salam Abdul Rahman A.A. Al Ibraheemi, Karrar Kareem Jawad
This paper investigates the impact of the COVID-19 pandemic on the integration and diversification potential of European football club stocks. Football clubs represent a unique asset class with ties to geographic regions yet distinct brand identities. Using stock data for 14 major clubs before and after March 2020, we examine how COVID-19 altered correlations between equities. We find increased market synchronization, with higher correlations over 0.3 post-pandemic, indicating tighter relationships especially along country/league lines. However, some differentiation based on firm-specific factors persists. Our analysis shows constructing optimized portfolios can still enhance returns versus equal weighting, but managing risk is more difficult. Overall, while COVID-19 integration presents diversification challenges, opportunities remain by carefully selecting assets with moderate correlations. This study provides investors and academics insight into how a major crisis reshapes football stock dynamics, increasing systematic risk exposure. It highlights the need to reevaluate assumptions underlying portfolio construction in light of shifting correlations.
