Who Will Win the World Cup 2006? UBS Analysts Predict the World Champion

Based on a simulation, the analysts have determined that Italywill win. The simulation was carried out using scientific methodscomparable to those used by experts to make economic andfinancial-market forecasts. The model developed by analysts was thentested for reliability by applying it to past football World Cup andEuropean tournaments, with remarkably precise results: the simulationcorrectly predicted 89 percent of all of the semi-final winners of theprevious nine World Cups.

The simulation

According to the UBS simulation, further results will be asfollows: Germany will lose to Argentina in the 3rd round and Italywill beat France at the same stage. They will be closely followed bythe Netherlands, who will send England home. In the fourth pairing,the Brazilians will dominate the Spaniards. The semi-finals will thenbe down to the favorites: the Netherlands will draw the short strawagainst the Brazilians, the Italians will beat Argentina. In thefinal, the Brazilians will be forced to accept the fact that theItalians are the better team in this tournament.

Many influencing factors

Along with "football fever", the team around UBS Wealth ManagementChief Economist Klaus Wellershoff was interested to find out whatvariables are important in predicting World Cup success. In doing so,they discovered that many things that appear to be obvious are, infact, not crucial to winning the World Cup. An example of this wouldbe the size of a country's population, which is often incorrectlycorrelated to the amount of potential athletic talent. The FIFArankings, which list the top national soccer teams, also prove to beof limited use when it comes to making a prediction: the FIFA listcompiles the sporting success of the individual teams but assignsequal value to all wins, no matter how strong the opponent.

Reality wins

The creation of the World Cup prediction was an intellectualchange of pace for the UBS analysts, but it also delivered additionalinsights. The exercise, for example, gave the experts the opportunityto demonstrate the flexibility of their methods outside their typicalparameters.

Of course, there are also limits. According to the model, Greecewould never have become European champion in 2004. Sports do stillfollow their own rules - and are more attractive than any simulation.