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Saxo Strats’ 2022 World Cup Predictions: Third Update

Equities 5 minutes to read
PG
Peter Garnry

Head of Equity Strategy

Summary:  We have updated our model input with new Elo momentum and new squad dynamic factors, and based on these new inputs the model is still favouring the Netherlands closely followed by Argentina and Brazil. From the quarter finals and onwards everything can happen in football as the game in a high variance one with luck playing a big role in the range of outcomes, just like in financial markets.


It is getting closer and everything can happen, even for the Netherlands

After four matches in the first stage of the knockout phase we have chosen to update our model and subsequent monte carlo simulation. We have updated the model input by updating the 1-year Elo momentum factor and squad dynamics reflecting the underlying strength and momentum as we move closer to the finale. Emotions always run high and there will always be disagreements with expert opinion or predictions made by a model as they never fully capture the “truth” seen by the football fan.

Our new model predictions are shown below and still have the Netherlands as the favourite to lift the 2022 FIFA World Cup trophy which has been a consistent prediction since the start of the tournament. The Dutch coach “Iron Tulip” Van Gaal split opinions as many criticise him for playing boring football, but his tactics are always well-thought and if we look at the 1-year change in the Elo rating, then no other team has done as well as the Netherlands. As we move into the quarter finals anything can happen as our prediction probabilities also show. The relative strength between the remaining teams in the quarter finals is so low that in a high variance game like football they can all win as luck plays a big role in football outcomes over a short sequence of games. Our model has increased the win probability for Argentina and Brazil.

5_PG_1
Source: Saxo

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