UBS uses stock-picking tech to predict the winner of the 2018 soccer World Cup

  • Perhaps unsurprisingly, simulations indicate no country has higher odds of winning the tournament than current champions Germany, leading the table with a likelihood of 24 percent.
  • Perennial underachiever England could be a surprising sight to some to be as high as fourth on the list, especially as it limped out in the group stage at the last World Cup four years ago.

Predicting the winner of a soccer World Cup isn't an exact science, with polar bears, meerkats and perhaps most famous of all, Paul the Octopus all making their picks for winners in years gone by.

This time round in Russia, Swiss lender UBS has thrown its hat into the ring by using econometric tools — more traditionally applied to assess investment opportunities — to predict who will lift the trophy in Moscow on July 15.

Perhaps unsurprisingly, simulations indicate no country has higher odds of winning the tournament than current champions Germany, leading the table with a likelihood of 24 percent.

By its own admission UBS's system is not perfect, but the bank is confident that it has identified enough key variables have been identified to support the claims that also install Brazil and Spain as the most likely to challenge the Germans.

Flag bearers carry the Mexican and Brazilian flags.
Getty Images
Flag bearers carry the Mexican and Brazilian flags.

"No matter whether they are analyzing global markets or soccer tournaments, people tend to be biased towards local favorites. The same quantitative discipline that the chief investment office applies to investments has proven useful in successfully looking beyond a home bias in portfolios and sports events," said Mark Haefele, chief investment officer at UBS Global Wealth Management said in a research note Thursday.

Perennial underachiever England could be a surprising sight to some to be as high as fourth on the list, especially as it limped out in the group stage at the last World Cup four years ago.

England Manager Gareth Southgate named his 23-man squad for this tournament on Wednesday, with a clear emphasis on youth, with an average age of 26 years and 18 days. With a favorable draw, potentially avoiding the likes of Germany, Brazil and Spain in the second round, it's predicted the team could be in line for their best World Cup performance since 1990, with an 18.7 percent chance of finishing as runners up.

Despite being the lowest ranked team in the tournament, the report also suggests host country Russia should still be optimistic about its chances. Six out of the previous 20 champions lifted the trophy on home soil, while two more hosts made it to the finals, and five more to the semis.

Those expecting Russia to go all the way and claim an improbable win though, look set to be disappointed, with the formula suggesting it has a 2 percent chance of being the overall winner.

Using the system, each World Cup group has been rated in terms of its perceived difficulty to qualify from, with Russia's Group A, containing Egypt, Saudi Arabia and Uruguay emerging as by far the weakest.

According to the same formula though, Group H containing Colombia, Japan, Poland, and Senegal is hardest to predict, as teams are all ranked fairly close. Although the model predicts Colombia should take top spot, followed by Poland.

As for the chances of Argentina and Portugal, even UBS's report states much of their fate will come down to the performances of their respective key men Lionel Messi and Cristiano Ronaldo. The data predicts the chances of both their sides diminish beyond the quarter-finals, as the world's two best players begin what could be their last shots at a World Cup winner's medal.