Sample

AAA

DEFINITION of 'Sample'

A subset containing the characteristics of a larger population. Samples are used in statistical testing when population sizes are too large for the test to include all possible members or observations. A sample should represent the whole population and not reflect bias toward a specific attribute.

INVESTOPEDIA EXPLAINS 'Sample'

A sample is a smaller, manageable version of a larger group. For example, if you wanted to test an investment strategy on past stock data, you would have an enormous number of stocks to test. Instead of testing the strategy on every stock, you would use a sample, which allows you to draw statistical insights from a smaller group of stocks. The sample should not contain any bias, such as the survivorship bias, where you might only use stocks that have survived the entire length of time you wish to test. Choosing a sample randomly should eliminate the possibilities of bias.

RELATED TERMS
  1. Sampling Distribution

    A probability distribution of a statistic obtained through a ...
  2. Normal Distribution

    A probability distribution that plots all of its values in a ...
  3. Look-Ahead Bias

    Bias created by the use of information or data in a study or ...
  4. Sampling Error

    A statistical error to which an analyst exposes a model simply ...
  5. Survivorship Bias

    The tendency for mutual funds with poor performance to be dropped ...
  6. Attribute Bias

    The tendency of stocks selected by a quantitative technique or ...
RELATED FAQS
  1. What are some examples of stratified random sampling?

    Simple random sampling is a sample of individuals that exist in a population; the individuals are randomly selected from ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    Find The Highest Returns With The Sharpe Ratio

    Learn how to follow the efficient frontier to increase your chances of successful investing.
  2. Active Trading Fundamentals

    Bet Smarter With The Monte Carlo Simulation

    This technique can reduce uncertainty in estimating future outcomes.
  3. Active Trading

    Modern Portfolio Theory: Why It's Still Hip

    See why investors today still follow this old set of principles that reduce risk and increase returns through diversification.
  4. Markets

    A Guide To Conference Board Indicators

    Learn to put the CB data sets to trading use. Each chapter takes you through one of the board's benchmark indicators or surveys, their significance and their applications.
  5. Fundamental Analysis

    What is a Null Hypothesis?

    In statistics, a null hypothesis is assumed true until proven otherwise.
  6. 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 ...
  7. 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.
  8. 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.
  9. Technical Indicators

    The Normal Distribution Table, Explained

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

    Can Investors Trust Official Statistics?

    The official statistics in some countries need to be taken with a grain of salt. Find out why you should be skeptical.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. 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 ...
  5. 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 ...
  6. Hurdle Rate

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