Ernest Biktimirov, Professor of Finance in Brock’s Goodman School of Business, wrote a piece recently published in The Conversation about the impact the Stanley Cup finals have on the stock market.

Biktimirov writes:

Although no Canadian teams made it to the Stanley Cup finals this year, Canadians may still have an extra reason to tune in and watch closely on Monday night — and to cheer for the Washington Capitals.

Originally mentioned in the Canadian edition of the Essentials of Corporate Finance textbook in 2007, the Canadian stock market tends to perform much better in the year when an Eastern conference team lifts Lord Stanley’s Cup.

Specifically, starting from the 1993-1994 NHL season (when the names of conferences were changed to Eastern and Western to reflect their geographic locations), the S&P/TSX composite index gained on average 11 per cent if an Eastern conference team won the Stanley Cup. In contrast, the Canadian stock market produced less than a quarter of that, 2.6 per cent to be exact, in the year when a Western conference team was victorious.

And in 10 times when an Eastern team won the Stanley Cup, the S&P/TSX composite index finished in the red for the year only twice.

Although not as distinct —hockey is still largely a Canadian game, after all — a similar relation seems to exist south of the border as well.

The Dow Jones industrial average index increased on average by 13.7 per cent in the year when an Eastern conference team won, but produced only half of that when the Western conference prevailed.

Continue reading the full article here.