Horse racing, like business, can be an unpredictable affair. Last year, Prince of Penzance won the Melbourne Cup with odds of 101 to one, becoming the equal longest priced winner in the history of the race, and the first horse since 1940 to win at those odds. The difficult-to-predict win delivered us a healthy serve of humble pie.
However, more often than a random pick, the bookies and the wisdom of crowds (by influencing odds) get it right. Consider that 35 of 155 favourites (23%) have gone on to win the Melbourne Cup. And 72 of 155 favourites (46%) have finished in the top three. In the absence of any other information, backing the favourite is a logical bet.
For more than 150 years, we have looked to bookies and other 'experts' for guidance as to who will win the great race. Nevertheless, with the emergence of big data and advanced analytics techniques in recent years, computers fuelled by data can now be used to augment human experience to provide more robust predictions.
Data-driven strategies can reveal insights that human psychology and 'gut feel' overlook. This occurred in 2014 when our analysis predicted that Protectionist would win the Melbourne Cup, despite lagging behind Admire Rakti and Lucia Valentina in bookies' estimates. Protectionist won by four lengths.
This year we're at it again. Using our brightest minds, current and historical data, statistical techniques and specialised software, we have cranked the handle on our Melbourne Cup analytical model. The model factors in horses' physical characteristics, recent form, market sentiment, and other relevant data.
While the finer details of our model are a closely guarded secret, we can reveal that it processes race data since the cup was first run in 1861. Some interesting insights are that there has never been a winner from barrier 18, and that only 11 horses have won the Caulfield Cup and Melbourne Cup double (we're looking at you Jameka).
The results are in and this year we predict that Hartnell will win the Melbourne Cup. It's the first time in the 3 years that we have been performing analytics on the race that there is consensus between our model and popular sentiment. With the bookies and big data in agreement, backing the favourite is an even more logical bet!
Check out the full results of our analysis by following the link below.
Disclaimer: While we have deep expertise in data and analytics, our knowledge of horse racing is far less advanced. We're doing this just for fun (and perhaps bragging rights if we predict accurately). If you're going to have a punt, please do so responsibly.
Bridge Data & Analytics Team
Bridge is a management consulting firm specialising in the investment and wealth management industry. Our Data & Analytics practice helps organisations to improve business performance using data-driven strategies. To discuss how we can help you turn data into a competitive advantage, please call us on +61 2 8599 3554.