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. Mean

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

    A theory suggesting that prices and returns eventually move back ...
  4. Geometric Mean

    The average of a set of products, the calculation of which is ...
  5. Arithmetic Mean

    A mathematical representation of the typical value of a series ...
  6. Regression

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

    What is a Null Hypothesis?

    In statistics, a null hypothesis is assumed true until proven otherwise.
  7. Investing

    How to Use Stratified Random Sampling

    Stratified random sampling is a technique best used with a sample population easily broken into distinct subgroups. Samples are then taken from each subgroup based on the ratio of the subgroup’s ...
  8. Fundamental Analysis

    Lognormal and Normal Distribution

    When and why do you use lognormal distribution or normal distribution for analyzing securities? Lognormal for stocks, normal for portfolio returns.
  9. Investing Basics

    Using Normal Distribution Formula To Optimize Your Portfolio

    Normal or bell curve distribution can be used in portfolio theory to help portfolio managers maximize return and minimize risk.
  10. Technical Indicators

    The Normal Distribution Table, Explained

    The normal distribution formula is based on two simple parameters - mean and standard deviation

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center