DEFINITION of 'Multiple Discriminant Analysis  MDA'
A statistical technique used to reduce the differences between variables in order to classify them into a set number of broad groups. In finance, this technique is used to compress the variance between securities while also allowing the person to screen for several variables. It is related to discriminant analysis, which, in simplified terms, tries to classify a data set by setting a rule (or selecting a value) that will provide the most meaningful separation.
BREAKING DOWN 'Multiple Discriminant Analysis  MDA'
Although this technique requires a fair bit of mathematics, it is relatively simple. MDA allows an analyst to take a pool of stocks and focus on the data points that are most important to a specific type of analysis, shrinking down the other differences between the stocks without totally factoring them out. For example, MDA can be used for selecting securities according to the statisticallybased portfolio theory set forth by Harry Markowitz. Properly applied, it will factor out variables like price in favor of values that measure volatility (beta) and historical consistency. Edward Altman is famous for using multiple discriminant analysis in creating the AltmanZ score.

Management Discussion and Analysis ...
A section of a company's annual report in which management discusses ... 
Analysis Of Variances  ANOVA
An analysis of the variation between all of the variables used ... 
Variability
The extent to which data points in a statistical distribution ... 
Sensitivity Analysis
Sensitivity analysis is a technique used to determine how different ... 
Analysis Of Variance  ANOVA
A statistical analysis tool that separates the total variability ... 
Variance
The spread between numbers in a data set, measuring Variance ...

Investing
Management Discussion And Analysis (MD&A)
The management discussion and analysis section of a companyâ€™s annual report explains many aspects of a companyâ€™s performance. 
Investing
Explaining Variance
Variance is a measurement of the spread between numbers in a data set. 
Insights
Understanding Regression
Regression is a statistical analysis that attempts to predict the effect of one or more variables on another variable. 
Investing
What's a Sensitivity Analysis?
Sensitivity analysis is used in financial modeling to determine how one variable (the target variable) may be affected by changes in another variable (the input variable). 
Investing
Calculating Portfolio Variance
Portfolio variance is a measure of a portfolioâ€™s volatility, and is a function of two variables. 
Small Business
What is Price Discrimination?
Price discrimination occurs when a company charges different customers different prices for the same goods or services. 
Trading
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This system identifies the intraday price movements that indicates entry points for your buy or sell orders. 
Investing
Stock and Flow Variables Explained: A Closer Look at Apple
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Investing
Scenario Analysis Provides Glimpse Of Portfolio Potential
This statistical method estimates how far a stock might fall in a worstcase scenario. 
Investing
Understanding Statistics
Statistics provide the means to analyze data and then summarize it into a numerical form.

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What are the different types of price discrimination and how are they used?
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