The World Cup’s correlation with the financial market goes back some way, but it’s in the final weeks before kickoff that things begin to get interesting.
And that’s not only because the World Cup comes only once in four years but also because financial analysts tend to get carried away closer to the day.
The folks at Goldman Sachs are just some of them.
They’ve been feeding a certain kind of data into their spreadsheets and have come up with this: Brazil will win its own World Cup, and if it doesn’t, Argentina or Germany will take the trophy.
That’s more like a bottom-line statement in a financial analysis but the US investment bank does have some numbers: 48.5 percent probability for Brazil, 14.1 percent for Argentina and 11.4 percent for Germany.
But there’s more.
Goldman says the availability of arable land in certain countries has a direct correlation with their appearance in a World Cup final, meaning countries with lots of wide, open spaces such as Argentina and Brazil outperform small, crowded countries such as the Netherlands.
A World Cup champion will see its stock market outperform the global market by 3.5 percent in the month following the win, but the frenzy won’t last. Hmm.
The market then will underperform by 4 percent in the following year.
A certain bank in Denmark predicts the United States will beat Portugal in the so-called “Group of Death”, according to the Financial Times.
But apparently, there’s also a bit of science in this whole equation.
Celebrated British physicist Stephen Hawking has described a formula that slashes the probability of England winning a match.
We present it in his own words below (with apologies to BBC):
“The impact of environmental factors alone is quite staggering. A 5 celsius degree rise in temperature reduces our chances of winning by 59 percent. We are twice as likely to win when playing below 500 meters above sea level. And our chances of winning improve by a third when kicking off at three o’clock local time.”
Need we say more?
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