Goldman Sachs predicts hosts France to win Euro 2016
Company's Economic Research team applies prediction model to show punters who to back
- The model says that France have a 23% chance of winning, followed by Germany, Spain and England
- The study takes into account historical performance data similar to that used to rank chess players
Updated : 11:20
So, there you have it. France are going to win Euro 2016. That's what Goldman Sachs says anyway. The multinational banking firm's Economic Research team has released their predictions for the summer tournament, and they believe the hosts have what it takes to go all the way.
Their analysis is based on a model taking various factor into account, such as Elo ratings, which were originally used to rank chess players. According to Goldman Sachs, " it is a composite measure of national football team success that evolves depending on a team's results and the strength of its opponents".
By making a prediction for each game based on the Elo system, they would then generate a set of probabilities that a particular team reaches a particular stage of the tournament, up to and including the final.
The model says that France has a 23% probability of winning the trophy
"The model says that France has a 23% probability of winning the trophy, followed by Germany at 20%, Spain at 14%, and England at 11%. Although Germany has the highest Elo rating, France is favored because of its home advantage," said Goldman Sachs.
Should you put your house on France then?
Probably not. As can be imagined, these predictions are far from being completely trustworthy, due to the vastly unpredicable nature of team sports. GS recognise this fact.
"It is difficult to assess how much faith one should have in these predictions. On the plus side, our approach carefully considers the stochastic nature of the tournament using statistical methods, and we do think that the Elo rating is a compelling summary of a team's track record."
It is difficult to assess how much faith one should have in these predictions
"On the minus side, we ignore a number of potentially important factors that are difficult to summarize statistically, including the quality of the individual players unless they are reflected in the team's record."
When compared with the various bookmakers' odds for the tournament, the chances of each team are of a similar standing, lending weight to GS's theory. As they have said, "a possible reason is that professional betting firms use many of the same inputs - such as Elo ratings - in their analysis and that they process the information in ways that are ultimately similar to ours."