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UBS ran 10,000 simulations of the World Cup — and one team is the head and shoulders above the rest


Germany FIFA World Cup 2014

UBS has used statistical modelling to forecast the outcome of the 2018 World Cup, which starts in Russia on June 14.
Reigning champions Germany are set to retain their title in 2018, with a 24% chance of winning the tournament, according to UBS.
Brazil, Spain, and, surprisingly, England are the next most favoured teams in UBS’ model.
At other end of the scale it is bad news for Panama, Egypt, Tunisia, Costa Rica, and Saudi Arabia, all of whom the bank’s analysts say have literally zero chance of being crowned champions.
You can see all of Business Insider’s World Cup coverage here.

LONDON — Every four years, the world watches in awe as 32 teams from around the globe take part in the FIFA World Cup, perhaps the biggest sporting occasion on the planet.

The World Cup comes replete with a number of storied traditions — England fans wildly overestimating their team’s chances of victory, a German win on penalties, and at least one lowly minnow nation shocking us all by performing well, to name just a few.

In recent years, however, a new and slightly nerdy trend has emerged — major banks trying to predict the outcome of the tournament using incredibly complicated statistical models usually reserved for analysing economics or businesses.

Several lenders, including the likes of Goldman Sachs, now engage in this tradition, and around a month before the start of the tournament, the first forecast of 2018 was released by Swiss bank UBS.

UBS is backing Germany, the reigning world champions and perennial tournament acheivers, to retain their crown in 2018, giving Europe’s biggest economy a 24% chance of winning football’s ultimate prize.

Close behind Germany in UBS’ estimations are Brazil and Spain, who respectively have a 19.8% and 16.1% chance of lifting the Jules Rimet trophy in Moscow on July 15.

Perhaps shockingly for many England fans after decades of disappointment at major tournaments, England are the fourth favourites for the cup, according to UBS’ modelling, although they have a paltry 8.5% chance of winning.

“England has a balanced team, an attribute that complements teamwork and can transform a successful team into a future champion,” Mark Haefele, Chief Investment Officer at UBS Global Wealth Management said in a statement.

At the other end of the scale it is bad news for Panama, Egypt, Tunisia, Costa Rica, and Saudi Arabia, all of whom have literally zero chance of being crowned champions, according to the bank’s analysts.

You can see a full table of probabilities below (note that UBS included Italy, which failed to qualify, in its model as a courtesy to the great footballing nation):

UBS created its predictions by inputting a series of variables, including the ELO ranking of teams — which is an objective measure of how good they are — into a statistical model, and then running that model through a so-called Monte Carlo simulation. Here’s the bank’s explanation of how it is done:

“To account for the many different roads to the final, we conduct what statisticians call a Monte Carlo simulation. What might …read more

Source:: Business Insider

      

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