After an inconclusive World Cup opener on Friday, we’re still on the look-out for decent prediction models for who’s going to win.

This one’s looking good, even if (horror!) market quants didn’t design it:

Via Nate Silver at FiveThirtyEight — the Soccer Power Index:

Soccer is tough to predict, so take with the usual a grain of salt, but there was a lot of thought put into SPI, as you can see here. Among other things, SPI takes into account the performance in international club play of the members of each team’s roster, and looks at the rosters for each game to determine which matches teams were taking seriously and which they weren’t….I hope this will be reasonably intuitive to people; PTS is the number of points that a team is projected to accumulate during group play (3 points are earned for each win and 1 for each draw); GF and GA are their projected goals for and against; Win and Adv are the probabilities that a team wins their group, and advances to the knockout stages, respectively. The rightmost two columns look beyond the group stages to the knockout stage; Semi is the probability that a team reaches the Semifinals, and Cup is their chance of coming home with a trophy.

So Brazil are out in front, which will please Danske Bank and Evolution’s crack quant teams. England are (unfathomably) placed in third — a crumb of comfort for JPMorgan’s contrarian model, which put them as frontrunners.

Although do note this rather crucial caveat to the SPI:

A caution: SPI does not account for injuries, of which there have been quite a few, although we’re working on a fix for that.

Yes, quite. Knowing England’s luck.

This entry was posted by Joseph Cotterill on Friday, June 11th, 2010 at 18:16 and is filed under Capital markets. Edit this entry.