If you're putting money in a World Cup office pool, you might want to consider paying close attention to the World Cup victory probability model developed by UBS. The Swiss investment bank's model's accuracy in 2006 was nothing short of impressive. According to a UBS investor research paper released yesterday, the UBS wealth management team correctly picked Italy as the winner, and successfully forecast 13 of the final 16 teams, six of the eight quarter finalists, and two of the semi-finalists — all before the 2006 World Cup began.
This year the bank has created and tweaked a mathematical formula that weighs past performance, whether or not a team is a host nation, and an "objective quantitative measure" assessing the strength of each team three months before the start of the World Cup, which begins June 11. The bank explains "socioeconomic factors like population size or GDP growth have been proven to have no explanatory power when it comes to forecasting the performance." This year the financial wizards at UBS are placing all the marbles on Brazil, giving the perennial soccer powerhouse a 22% edge in probability, with Germany (18%) and Italy (13%) following behind. Full USB percentages and breakdowns are after the jump.
Other contenders in soccer's Elite Eight include the Netherlands (8%), France (6%), Argentina (5%), Spain (4%) and England (4%). The bank claims the host country will advance to the second round. As for Uncle Sam? UBS gave Team USA only a 33% chance of qualifying to the initial 16, but snubbed the U.S. from further advancing. The complete breakdown is below.
It's worth remembering that the equity management team at USB isn't always accurate with their soccer bets. The London Telegraph reminds us the team they forecast to win the 2008 European Championship didn't even make it to the second round. Check out the detailed report here.
In the meantime, enjoy this bonus video, particularlly if you made it this far. It gets good at the 19 second mark (NSFW-ish). Trust me...