Recent content by AaCBrown

Your first question is easy. You could build a model of the form: second half of the season batting average = A * (first half of the season batting average for the player) + B * (first half of the season batting average for all players at the same position) + C * (first half of the season...

I don't think in terms of R^2 for this application. I'm trying to get a 55% win rate, meaning I need a 0.01 R^2 between my prediction and the outcome. In most textbook problems, an R^2 of 0.01 would not be considered useful. But it can make you rich if it's real. High R^2's usually describe...

S + N = 20%, this is what you observe. You can't measure S and N, you can only guess about them, hopefully with better than random accuracy. I this case you have conflicting information. The fact that this quarter's implied move is greater than last quarter's implied move inclines you to guess...

I respectfully disagree with both. There's more honesty and fair play among gamblers than among Wall Street dealers. And both Wall Street and the sports gambling business are highly evolved systems making it difficult for outsiders to pull money out. Setting accurate securities prices and...

You touch on some of the subtleties of shrinkage. It is a mathematical curiosity that you can improve estimates using completely unrelated information. But the practical effect is small. It's related to Hempel's paradox. If you want to investigate whether or not all ravens are black, you look...

Here's a non-sports example of pure shrinkage. A statistics professor instructs each student in the class to pick something that is unknown today, but will be known for sure next week, and to predict it. Students can pick anything--the high temperature in Central Park on Sunday, the closing Dow...

If I were just trying to predict NFL games, it would be easy to get high R^2, after all, the favorite wins about 2/3 of the time in the NFL. But I'm trying to predict versus the consensus of the betting markets. If there were any simple indicator that worked more than about 52% of the time, it...