Going into the FIFA 2022 World Cup we see numerous predictions of who will be this year’s winner – with Brazil being the current bookmaker favourite, closely followed by Argentina. But for a quantitative analyst like me, this is actually not the most interesting prediction. Why not look at the surprises we may see at the World Cup – can some of the underdogs run away with the trophy, or is it completely unlikely?
In a separate article, Saxo Strats ‘soccer experts’ present a macro-corrected prediction of who will be the winner of the World Cup.
To be able to quantify the surprising scenarios for the World Cup, we must estimate the probabilities for the different outcomes of a match, given some metrics related to each individual team. For this exercise we rank countries via their Elo rating, which is a relative way of measuring the skill level of teams/players within a certain field such as chess, baseball or soccer. The difference in the ratings has in soccer proven to be a fair predictor for the outcome of a match, with a higher probability of the high Elo rating to win. We have mixed the Elo ratings of the participating world cup teams with betting odds in order to find a mapping from the Elo ratings to the probability outcomes for each world cup match
As an example, Denmark (Elo 1971) will be facing Tunesia (Elo 1707) today. According to our model, Denmark has a 59 % of winning, 25 % of a draw and only 16 % chance of Tunisia winning.
A standard example for predictors of the World Cup winner is to assume that the team with the largest probability to will also be the winner, which in line with the bookmakers predict Brazil as winners: