Chart of the day: Which NFL team generated the best ROI this season?

Since 2005, Analytic Investors has been been applying its “innovative mathematical techniques to the gridiron” to determine each team’s performance — which they’ve coined “NFL Alphas” — for the season. What does this mean exactly? Per the firm’s “NFL Alphas 2012-2013” report: “In short, an NFL Alpha is the potential return-on-investment (ROI) that is earned by placing a systematic wager on each NFL team to win each of its games outright in the regular season. This can easily be confounded with the notion that wins beget Alpha. However, we see time and again that it isn’t necessarily a team’s success, but a team’s unexpected success that governs its profitability and hence Alpha.”

With that in mind, the team at Analytic Investors determined that the Indianapolis Colts provided the best ROI in the NFL this year. Although the firm notes that seven other teams equaled or bettered the 11-5 record the Colts posted this season, the fact that Indy only had two wins last season “set the bar deservedly low from day one.” What this means is that because of their dismal season last year, the Colts were only favored in six of their games this year. In other words, they offered “substantial return” to anyone willing to wager a bet on Indy. However, Analytic Investors notes that “an NFL Alpha is predicated on the assumption that an ‘investor’ in a team receives the fair payoff on an investment to win outright. In reality, bookmakers never pay fair odds, but our model assumes that odds are always fair.”

Without further ado, here is the full list of how the 32 NFL teams fared in terms of their ROI rankings. For further reading on Analytic Investors’ NFL-related mathematical work, click here.