Most bankers would have said the stakes were high enough at the Rugby World Cup final between bitter rivals Australia and England in Sydney. But that was not the case with Aussie investment bank Macquarie. It upped the ante by publishing research confidently predicting a home victory, entitled “Rugby World Cup – quant style – Why the Wallabies will win”.
Quant analyst Raelene de Souza and team attempted to apply statistical analysis to the match outcome. Using a “multi-factor model”, she crunched seven determinants including betting trends, past results, and the weather forecast and concluded Australia would win.
“It tied in with a conference we were running as part of the World Cup. We wanted to look at how you could apply quant strategies to predicting sporting events,” says de Souza. “Ninety per cent of people saw it for what it was – tongue in cheek.”
In the light of England’s dramatic win, de Souza admits perhaps some Australian irrational exuberance crept into an otherwise workmanlike piece. In particular, predicting the weather five days out as “likely to be similar, if not warmer, to Friday’s warm, sunny conditions”, might have been one forecast too many. English fans at the stadium would no doubt also take issue with the home advantage calculation.
As to whether her research was flawed in any fundamental way, de Souza concedes she missed one critical input. “My model was missing a key player calculation,” she says ruefully. “There definitely needed to be a Wilko factor!”
De Souza insists the research was not another episode in Australians’ favourite pastime of Pommie-bashing. “Not at all,” she laughs. “We have a lot of English clients. We were just trying to be very patriotic. After all, we’re the only Aussie investment bank.”
To prove the point, de Souza admits grudgingly that the result was fair. “England deserved to win,” she says between clenched teeth. “They were the better team.”
