- Goldman Sachs ran 1 million simulations to predict a winner
- Nigeria and Senegal came in at numbers 30 and 31 on the list
One of the greatest global competitions is underway and Wall Street titan Goldman Sachs (GS -0.23%) has surveyed the field of 32 countries competing in the 2018 World Cup for a winner. GS economists applied their statistical techniques to the world's most popular sport and determined Brazil has the best chance to take the Cup, with an 18.5% probability. Since soccer is quite an unpredictable game, where do your favorite teams land on this list?
Why This Matters: The world's most popular sport meets its biggest competitor machine learning. Goldman Sachs ran one million simulations to find the most likely outcome for the tournament. To come up with a winner they used a mix of data on team characteristics, individual players and recent team performance split into four different machine learning models. The economists were then able to analyze the number of goals scored in each match to understand the relationship between these characteristics and goals scored.
Nigeria and Senegal came in at numbers 30 and 31 respectively on the list. The research on Nigeria lead the company to note it’s a dynamic team and like the country, its soccer team has huge potential in its raw material to help make it out of the group stage. Also, GS economists note after several challenging years, economic recovery will gain pace in 2018 with growth for the year likely to come in at 2.5%.
As for Senegal they may have a better chance at continued high growth and relatively low inflation than winning the World Cup. According to IMF estimates, Senegal is expected to grow at at 6%-7% year over year.
For Goldman Sachs predicted winner Brazil the firm points out inflation and the policy rate are tracking at historically low levels. They also state growth has been uninspiring and the unemployment rate remains in double digits.
What’s Next: France came in second on the list with a 11.3% chance of claiming the title, followed by Germany with a 10.7% probability win. Goldman Sachs plans to update the match-by-match probabilities throughout the competition which should produce some interesting results.
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