Sine Wave
What is a Sine Wave? A sine wave refers to the graphical representation of the general function. The sine wave comes with a characteristic “S” shape where it oscillates above and below 0 in a periodic uniform manner. The sine function is a trigonometric function, which is a mapping from the set of all non-negative...
Seasonally Adjusted Annual Rate (SAAR)
What is the Seasonally Adjusted Annual Rate (SAAR)? The seasonally adjusted annual rate (SAAR) is an adjustment made to financial and economic data to take into account seasonal variations that occur through a period and is expressed as an annual total. Why is the Seasonally Adjusted Annual Rate a Crucial Measure Seasonal variations in data...
Hedonic Regression Method
What is the Hedonic Regression Method? The hedonic regression method is a regression technique used to determine the value of a good, service, or asset by fractionating the product into constituent parts or characteristics. It is done to determine the contributory value of each characteristic separately through regression analysis. The regression model should be able...
Volatility Quote Trading
What is Volatility Quote Trading? Volatility quote trading is a form of investment that focuses on the volatility that a security is estimated to experience in the future. Unlike a regular investment, volatility quote trading does not consider the price or intrinsic value of the investment; instead, it looks at the likelihood of volatility. In...
Heteroskedasticity
What is Heteroskedasticity? Heteroskedasticity refers to situations where the variance of the residuals is unequal over a range of measured values. When running a regression analysis, heteroskedasticity results in an unequal scatter of the residuals (also known as the error term). When observing a plot of the residuals, a fan or cone shape indicates the...
Scatter Plot
What is a Scatter Plot? A scatter plot is a chart type that is normally used to observe and visually display the relationship between variables. The values of the variables are represented by dots. The positioning of the dots on the vertical and horizontal axis will inform the value of the respective data point; hence,...
Random Sampling
What is Random Sampling? Random sampling, or probability sampling, is a sampling method that allows for the randomization of sample selection, i.e., each sample has the same probability as other samples to be selected to serve as a representation of an entire population. Random sampling is considered one of the most popular and simple data...
Lognormal Distribution
What is Lognormal Distribution? A lognormal distribution is common in statistics and probability theory. Lognormal distribution is also known as the Galton or Galton’s distribution, being named after Francis Galton, a statistician during the English Victorian Era. By definition, the lognormal distribution is the discrete and ongoing distribution of a random variable, the logarithm of...
Inferential Statistics
What is Inferential Statistics? Inferential statistics enables one to make descriptions of data and draw inferences and conclusions from the respective data. Through inferential statistics, an individual can conclude what a population may think or how it’s been affected by taking sample data. Inferential statistics is mainly used to derive estimates about a large group...
Factorial
What is Factorial? The factorial (denoted or represented as n!) for a positive number or integer (which is denoted by n) is the product of all the positive numbers preceding or equivalent to n (the positive integer). The factorial function can be found in various areas of mathematics, including algebra, mathematical analysis, and combinatorics. Starting...
