Is winning Formula One, the formula for added value?

Abstract

Corporate sponsorship has become an increasingly important marketing tool. To research its effect on the stock market we have conducted a study regarding how wins or losses in Formula One affect securities. By facilitating event methodology we show that there exists a correlation between Formula One race results and a certain sponsoring company’s stock return’s. We use results and stock returns from all events in 2009 and focused specifically on seven companies. The results show no significance in the overall results, but show correlation in six out of seven company’s individual results, ranging from plus 6.4 percent to minus 5,75 percent. Winning, losing or other events do not clearly add or subtract value to stock returns, showing that the subject still needs further research in order to reach a conclusive result.