DEFINITION
A measure in statistics that refers to the variance of errors over a sample. Heteroskedasticity is present in samples where random variables display differing variabilities than other subsets of the variables. Such results can cause errors in regression analysis and other statistical measures in which statistical measures can be incorrectly justified.INVESTOPEDIA EXPLAINS
Most financial instruments, such as stocks, follow a heteroskedastic error pattern. For example, in regression, a mathematical relationship between a stock and some other type of measure is to be discovered over a period of time. The error found between the line of best fit and the actual data point will vary; for instance, as each variable gets larger the error may increase.RELATED TERMS

Line Of Best Fit
A straight line drawn through the center of a group of data points plotted on ... 
Poisson Distribution
A statistical distribution showing the frequency probability of specific events ... 
Sampling Error
A statistical error to which an analyst exposes a model simply because he or ... 
Absolute Frequency
A statistical term describing the total number of trials or observations within ... 
Regression
A statistical measure that attempts to determine the strength of the relationship ... 
Homoskedastic
A statistics term indicating that the variance of the errors over the sample ... 
Autocorrelation
A mathematical representation of the degree of similarity between a given time ... 
Compound Annual Growth Rate  CAGR
The yearoveryear growth rate of an investment over a specified period of time. ... 
MeanVariance Analysis
The process of weighing risk against expected return. Mean variance analysis ... 
Systematic Sampling
A type of probability sampling method in which sample members from a larger ...
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