Stats question

Optuma Forums Feature Requests Stats question

This topic contains 1 reply, has 2 voices, and was last updated by Mathew Mathew 1 week, 2 days ago.

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  • #49963

    Patrick
    • Topics: 37
    • Replies: 8
    • Posts: 45

    reviewing your stats lecture. I think I have a grasp of what you are lecturing here few bits and pieces coming back to me from school. But can you please explain a bit further on the following: 

    You must understand the difference between a distribution of returns and a sample distribution.

     

    Thank you,

    Patrick

    #49987
    Mathew
    Mathew
    • Topics: 15
    • Replies: 887
    • Posts: 902

    Hi Patrick

    The difference is what was used to make up the distribution.

    In a distribution of returns, we are taking all the returns we got from our test (or real life Portfolio) and grouping the returns into bins. We’d call this descriptive statistics because it is describing what happened.

    In a sample distribution, we are pulling out a random set of data from the population, measuring it, and putting the results in a distribution. Based on what we see, we “infer” what we expect to be true for the whole population. We call the inferential statistics because we are inferring that or results apply to the population.

     

    Hope that helps

     

    Mathew

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