T-Test
📈 Investing
Quick Definition
A T-test is a type of inferential statistic used to determine if there is a significant difference between the means of two groups, which may be related in certain features.
Formula
t = (X̄1 - X̄2) / SEExamples
- 1Comparing the average returns of two different investment portfolios to determine if one outperforms the other statistically.
- 2Analyzing whether new trading strategies yield higher returns compared to traditional strategies.
- 3Evaluating the effect of a new policy on stock market performance by comparing market data before and after the policy implementation.
Tags
statisticsdata-analysisinvestment-analysishypothesis-testingfinancial-modeling
Related Terms
Other terms you might find helpful
Hypothesis Testing
Hypothesis testing is a statistical method used to make decisions about the validity of a claim based on sample data.
P-Value
The p-value is a statistical measure that helps determine the significance of the results obtained from a data set, indicating the probability of observing results at least as extreme as those measured when the null hypothesis is true.
Standard Deviation
Standard deviation is a statistical measure that quantifies the amount of variation or dispersion of a set of values.
Quick Info
Category:Investing
Difficulty:intermediate
Last Updated:6/20/2025