Adjusted Mean

AAA

DEFINITION of 'Adjusted Mean'

Statistical averages that have been corrected to compensate for data imbalances. Outliers, present in data sets will often be removed as they have a large impact on the calculated means of small populations; an adjusted mean can be determined by removing these outlier figures. Adjusted means are also called "least squares means" and are calculated using a multiple regression equation.

INVESTOPEDIA EXPLAINS 'Adjusted Mean'

For example, in studying both men and women who participate in a particular behavior or activity, it may be necessary to adjust the data to account for the impact of gender on the results. Without using adjusted means, results that might at first seem attributable to participating in a certain activity or behavior could be skewed by the impact of participants' gender. In this example, men and women would be considered covariates, a type of variable that the researcher cannot control but that affects an experiment's results. Using adjusted means compensates for the covariates to see what the affect of the activity or behavior would be if there were no differences between the genders.



RELATED TERMS
  1. Maximum Leverage

    The maximum size of a trading position permitted through a leveraged ...
  2. Multiple Linear Regression - MLR

    A statistical technique that uses several explanatory variables ...
  3. Regression

    A statistical measure that attempts to determine the strength ...
  4. Mean

    The simple mathematical average of a set of two or more numbers. ...
  5. Mean Reversion

    A theory suggesting that prices and returns eventually move back ...
  6. Arithmetic Mean

    A mathematical representation of the typical value of a series ...
RELATED FAQS
  1. What is a "linear" exposure in Value at Risk (VaR) calculation?

    A linear exposure in the value-at-risk, or VaR, calculation is represented by positions in stocks, bonds, commodities or ... Read Full Answer >>
  2. What is the criteria for a simple random sample?

    Simple random sampling is the most basic form of sampling and can be a component of more precise, more complex sampling methods. ... Read Full Answer >>
  3. What are some examples of ways that sensitivity analysis can be used?

    Sensitivity analysis is an analysis method that is used to identify how much variations in the input values for a given variable ... Read Full Answer >>
  4. How is the 80-20 rule (Pareto's Principle) used in macroeconomics?

    The 80-20 rule was first used in macroeconomics to describe the distribution of wealth in Italy in the early 20th century, ... Read Full Answer >>
  5. What are some of the uses of the coefficient of variation (COV)?

    In statistics, the coefficient of variation (COV) is a simple measure of relative event dispersion. It is equal to the ratio ... Read Full Answer >>
  6. What is the difference between systematic sampling and cluster sampling?

    Systematic sampling and cluster sampling differ in how they pull sample points from the population included in the sample. ... Read Full Answer >>
Related Articles
  1. Active Trading Fundamentals

    Simple Moving Averages Make Trends Stand Out

    The moving average is easy to calculate and, once plotted on a chart, is a powerful visual trend-spotting tool.
  2. Investing Basics

    Regression Basics For Business Analysis

    This tool is easy to use and can provide valuable information on financial analysis and forecasting. Find out how.
  3. Active Trading Fundamentals

    Weighted Moving Averages: The Basics

    We take a closer look at the linearly weighted moving average and the exponentially smoothed moving average.
  4. Active Trading

    The Linear Regression Of Time and Price

    This investment strategy can help investors be successful by identifying price trends while eliminating human bias.
  5. Active Trading Fundamentals

    Leading Indicators Of Behavioral Finance

    Discover how put-call ratios and moving averages can be used to analyze investor behavior.
  6. Fundamental Analysis

    Calculating the Herfindahl-Hirschman Index (HHI)

    The Herfindhal-Hirschman Index, (HHI) is a measure of market concentration and competition among market participants.
  7. Fundamental Analysis

    Calculating Net Interest Margin

    Net interest margin is a metric used to measure the effectiveness of a company’s investment decisions, particularly financial institutions.
  8. Economics

    Why The U.S. Economy Is Ready For Liftoff

    Though the U.S. economy is once again underperforming expectations, as it has for the past five years, the economy is ready for a (Fed) interest rate hike.
  9. Fundamental Analysis

    Calculating Book Value of Equity Per Share (BVPS)

    Book value of equity per share compares the total shareholder equity, as stated in the company’s balance sheet, to the total number of shares outstanding.
  10. Fundamental Analysis

    How to Calculate a Combined Ratio

    Combined ratio is a formula used in the insurance industry to measure the performance of an insurance company.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center