Several banks predicted that Germany had a direct route to the World Cup finals in Russia. Mexico's 1-0 win overnight may upset many, including algorithms.
Out of 32 the teams contesting the championship Germany is the bankers most common pick to lift the trophy. Banks that predicted Germany will be lining up in the finals include UBS, DBS and Goldman Sachs, according to a «New York Times» report.
UBS predicted that Germany, Brazil and Spain are most likely to win but Germany was their favourite. The bank gave Germany a 24 percent chance of winning.
Buyer Beware
Goldman Sachs' macro research team, using artificial intelligence algorithms, has picked Brazil and Germany to face-off in the final. The team inputs data on team characteristics, individual players and recent team performance into four different types of machine learning models to analyse the number of goals scored in each match.
Goldman came up with an algorithmic score of 1.7 goals for Brazil and 1.41 goals for Germany in the final. Caveat Emptor: Goldman had predicted a Brazilian victory for the last three World Cups, but had been wrong every single time.
Separately, Singapore's DBS Bank with no shortage of data crunchers opted for Germany and Brazil as their favourites to make the final using internal polls.
Other Predictions
Japanese bank Nomura applies the theory of balanced risk to predict the world cup finals teams: France and Spain. For semi-finals, they picked France, Spain and Brazil.
«Being analysts, we have to apply some rigour to our World Cup predictions, so we have decided to apply portfolio theory and the efficient markets hypothesis to the World Cup», Nomura said.
Dutch bank ING picks Spain as the world champion and France as the runner-up using an unusual measure of market value. The technique calculates the market value of the nation's team and its previous performance, and is premised on the correlation of market value and success.
Based on its calculations, Spain will be crowned world champion with team value of 1.04 billion euros, followed by France, whose team is valued at 1.03 billion euros.
