Batting Average

DEFINITION of 'Batting Average'

A statistical measure used to measure an investment manager's ability to meet or beat an index. Batting average is calculated by dividing the number of days (or months, quarters, etc.) in which the manager beats or matches the index by the total number of days (or months, quarters, etc.) in the period of question and multiplying that factor by 100.

BREAKING DOWN 'Batting Average'

An investment manager who outperforms the market in 15 out of a possible 30 days would have a statistical batting average of 50. The longer the time period taken in the sample size, the more statistically significant the measure becomes. Many analysts use this simple calculation in their broader assessments of individual investment managers.

RELATED TERMS
  1. Alpha

    Alpha is used in finance to represent two things: 1. a measure ...
  2. Down-Market Capture Ratio

    A statistical measure of an investment manager's overall performance ...
  3. Up-Market Capture Ratio

    A statistical measure of an investment manager's overall performance ...
  4. Index

    A statistical measure of change in an economy or a securities ...
  5. Portfolio Manager

    The person or persons responsible for investing a mutual, exchange-traded ...
  6. Beta

    Beta is a measure of the volatility, or systematic risk, of a ...
Related Articles
  1. Personal Finance

    Does Your Investment Manager Measure Up?

    These key stats will reveal whether your advisor is a league leader or a benchwarmer.
  2. Brokers

    Evaluating Your Stock Broker

    Make sure you're getting the best service by staying informed and involved.
  3. Mutual Funds & ETFs

    Your Mutual Fund: It's Riskier Than You Think

    Fund managers often take on more risk than they should, putting business ahead of fund holders' interests.
  4. Options & Futures

    Has Your Fund Manager Been Through A Bear Market?

    How to find a portfolio that will survive when the bulls stop charging.
  5. Investing

    How to Prepare for the Low Return Environment Ahead

    Learn about the big takeaway from this week’s chart: Investors aiming for higher returns over the next five years should be prepared to stomach more volatility.
  6. Active Trading Fundamentals

    SandRidge's 3 Key Financial Ratios (SDOC)

    Learn more about SandRidge Energy, Inc., a history of the company's performance and financial stability through key financial ratios and its future outlook.
  7. Economics

    A Statistic About the U.S. Economy that May Surprise You

    Learn why many commentators seem to be pessimistically focused on the U.S. economy’s weak wage growth and manufacturing sector trouble.
  8. Economics

    The Current Probability of President Donald Trump

    Predict the current odds of a Donald Trump presidency, and understand the factors that have kept him on top and the looming challenges he faces.
  9. Fundamental Analysis

    Calculating the Coefficient Of Variation (CV)

    Coefficient of variation measures the dispersion of data points around the mean, a statistical average.
  10. Markets

    The Market Chart You Need to See This Week

    This week’s chart helps show why current low levels of stock market volatility look unsustainable and why now is a good time to prepare portfolios for a rockier road ahead.
RELATED FAQS
  1. Do plane tickets get cheaper closer to the date of departure?

    Read about when to buy flights. See how statistics can predict optimal pricing. Read about price volatility over time. Learn ... Read Answer >>
  2. Is Colombia an emerging market economy?

    Learn the definition of an emerging market economy, and understand how Colombia, while not yet developed, meets the standards ... Read Answer >>
  3. What assumptions are made when conducting a t-test?

    Learn what a t-test is, and discover the five standard assumptions that are made regarding the validity of sampling and data ... Read Answer >>
  4. What are some of the more common types of regressions investors can use?

    Learn about the most common types of regressions investors use to model asset prices including linear regressions and multiple ... Read Answer >>
  5. What types of assets lower portfolio variance?

    Learn what type of assets reduce portfolio variance and how modern portfolio theory uses correlation coefficients. Read Answer >>
  6. When is it better to use systematic over simple random sampling?

    Learn when systematic sampling is better than simple random sampling, such as in the absence of data patterns and when there ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center