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. Look-Ahead Bias

    Bias created by the use of information or data in a study or ...
  3. Normal Distribution

    A probability distribution that plots all of its values in a ...
  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 is the criteria for a simple random sample?

    Simple random sampling is the most basic form of sampling and can be a component of more precise, more complex sampling methods. ... Read Full Answer >>
  2. What are the best selection methods for creating a simple random sample?

    The best selection methods for selecting a simple random sample are the lottery method, using a random number table or having ... Read Full Answer >>
  3. 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 >>
  4. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  5. What are some of the more common types of regressions investors can use?

    The most common types of regression an investor can use are linear regressions and multiple linear regressions. Regressions ... Read Full Answer >>
  6. What types of assets produce negative portfolio variance?

    Assets that have a negative correlation with each other produce negative portfolio variance. Variance is one measure of the ... 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. Economics

    Explaining the Liquidity Coverage Ratio

    The liquidity coverage ratio requires banks and other financial institutions to hold enough cash and liquid assets on hand to weather market stress.
  6. Fundamental Analysis

    Calculating Valuation

    Valuation is the process of determining what an asset is worth.
  7. Economics

    Will the Selloff in China Hurt the Global Economy?

    Though China is the world’s second largest economy, its volatility in the stock market is unlikely to have an impact on the global or Chinese economy.
  8. Fundamental Analysis

    Understanding Qualitative Analysis

    Qualitative analysis is a general term describing the non-mathematical scrutiny used by investors and managers to make investment and business decisions.
  9. Economics

    Signs The U.S. Recovery Is Solid

    Many market observers lately have been making some pretty pessimistic evaluations of the U.S. economy, declaring that it’s stagnating and soft.
  10. Fundamental Analysis

    Explaining the Monte Carlo Simulation

    Monte Carlo simulation is an analysis done by running a number of different variables through a model in order to determine the different outcomes.

You May Also Like

Hot Definitions
  1. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  2. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  3. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  4. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  5. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  6. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!