Bayes' Theorem
What is the Bayes’ Theorem? In statistics and probability theory, the Bayes’ theorem (also known as the Bayes’ rule) is a mathematical formula used to determine the conditional probability of events. Essentially, the Bayes’ theorem describes the probability of an event based on prior knowledge of the conditions that might be relevant to the event....
Nonparametric Tests
What are Nonparametric Tests? In statistics, nonparametric tests are methods of statistical analysis that do not require a distribution to meet the required assumptions to be analyzed (especially if the data is not normally distributed). Due to this reason, they are sometimes referred to as distribution-free tests. Nonparametric tests serve as an alternative to parametric...
Nominal Data
What is Nominal Data? In statistics, nominal data (also known as nominal scale) is a type of data that is used to label variables without providing any quantitative value. It is the simplest form of a scale of measure. Unlike ordinal data, nominal data cannot be ordered and cannot be measured. Dissimilar to interval or ratio...
Ordinal Data
What is Ordinal Data? In statistics, ordinal data are the type of data in which the values follow a natural order. One of the most notable features of ordinal data is that the differences between the data values cannot be determined or are meaningless. Generally, the data categories lack the width representing the equal increments...
Mean
What is Mean? Mean is an essential concept in mathematics and statistics. The mean is the average or the most common value in a collection of numbers. In statistics, it is a measure of central tendency of a probability distribution along median and mode. It is also referred to as an expected value. It is...
Sample Selection Bias
What is Sample Selection Bias? Sample selection bias is the bias that results from the failure to ensure the proper randomization of a population sample. The flaws of the sample selection process lead to situations where some groups or individuals in the population are less likely to be included in the sample. The presence of...
Range
What is Range? In statistics and mathematics, range is the difference between the largest and smallest values in a dataset. The range is one of the measures of dispersion of data. Range in Finance In finance, the range is defined as a difference between the low and high prices of a security over a certain...
Type II Error
What is a Type II Error? In statistical hypothesis testing, a type II error is a situation wherein a hypothesis test fails to reject the null hypothesis that is false. In other words, it causes the user to erroneously not reject the false null hypothesis because the test lacks the statistical power to detect sufficient...
P-value
What is the P-value? In statistical hypothesis testing, the p-value (probability value) is a probability measure of finding the observed, or more extreme, results, when the null hypothesis of a given statistical test is true. The p-value is a primary value used to quantify the statistical significance of the results of a hypothesis test. The...
Empirical Rule
What is the Empirical Rule? In mathematics, the empirical rule says that, in a normal data set, virtually every piece of data will fall within three standard deviations of the mean. The mean is the average of all of the numbers within the set. The empirical rule is also referred to as the Three Sigma...
