Streak Sustainability Score

Overview

This pillar analyzes the statistical sustainability of a consecutive run, like a team's winning streak or an asset's price rise. It determines the likelihood of a streak continuing by comparing it against historical patterns, providing a powerful counter to market recency bias.

What It Does

The Streak Sustainability Score evaluates the current length of a streak against the complete historical distribution of all streaks for that specific entity. It calculates a percentile rank for the current streak and incorporates factors like performance volatility. A high score indicates a streak is statistically overextended and likely to reverse.

Why It Matters

Markets and bettors often over-extrapolate recent performance, creating the 'hot hand' fallacy. This pillar provides a quantitative, data-driven signal for when a streak is due for regression to the mean. This creates valuable opportunities for contrarian bets against popular sentiment.

How It Works

First, the system compiles a complete history of event outcomes for an entity, like game results or daily price closes. It then identifies all historical winning and losing streaks to create a statistical distribution of their lengths. The current streak's length is compared to this distribution to generate a core sustainability rating, which is then adjusted for overall performance volatility.

Methodology

The score is a weighted average based on: 1. Current Streak Percentile Rank: The length of the current streak is ranked against all historical streak lengths for that entity. 2. Markov Chain Transition Probability: Calculates the historical probability of transitioning from the current state to the same state (e.g., Win -> Win). 3. Volatility-Adjusted Length: The streak's length is normalized by the entity's historical performance standard deviation; long streaks are less sustainable in high-volatility contexts.

Edge & Advantage

This pillar offers a clear statistical edge by identifying when market sentiment, driven by a hot streak, has become irrational and vulnerable to a correction.

Key Indicators

• Streak Percentile Rank

  high

  The current streak's length relative to all historical streaks for the entity. A 95th percentile rank means the current streak is longer than 95% of all past streaks.

• Continuation Probability

  high

  The historical probability that a streak of the current length continues for at least one more event.

• Performance Volatility

  medium

  Measures the entity's overall outcome consistency. Streaks are less sustainable for entities with high performance volatility.

Data Sources

• Sports Reference

  Provides historical game logs, win/loss records, and team statistics for major sports leagues.

• Yahoo Finance API

  Source for historical daily, weekly, and monthly price data for stocks, indices, and cryptocurrencies.

• FiveThirtyEight Data

  Historical polling data and election result histories useful for analyzing political momentum.

Example Questions This Pillar Answers

• → Will the Golden State Warriors win their 10th consecutive game tonight?
• → Will Ethereum close higher for the 8th day in a row?
• → Will a specific political candidate's polling numbers rise for a fifth consecutive week?

Tags