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. Sampling Error

    A statistical error to which an analyst exposes a model simply ...
  3. Normal Distribution

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

    Bias created by the use of information or data in a study or ...
  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 is a "linear" exposure in Value at Risk (VaR) calculation?

    A linear exposure in the value-at-risk, or VaR, calculation is represented by positions in stocks, bonds, commodities or ... Read Full Answer >>
  5. What are some examples of ways that sensitivity analysis can be used?

    Sensitivity analysis is an analysis method that is used to identify how much variations in the input values for a given variable ... Read Full Answer >>
  6. How is the 80-20 rule (Pareto's Principle) used in macroeconomics?

    The 80-20 rule was first used in macroeconomics to describe the distribution of wealth in Italy in the early 20th century, ... 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. Investing

    The Strong Dollar’s (Real) Toll On Tech Stocks

    A large portion of U.S. technology companies’ sales occur overseas, given the strong international business and consumer demand from many U.S. tech firms.
  6. Fundamental Analysis

    How to Calculate a Coverage Ratio

    In broad terms, the higher the coverage ratio, the better the ability of the enterprise to fulfill its obligations to its lenders.
  7. Fundamental Analysis

    Calculating the Herfindahl-Hirschman Index (HHI)

    The Herfindhal-Hirschman Index, (HHI) is a measure of market concentration and competition among market participants.
  8. Fundamental Analysis

    Calculating Net Interest Margin

    Net interest margin is a metric used to measure the effectiveness of a company’s investment decisions, particularly financial institutions.
  9. Economics

    Why The U.S. Economy Is Ready For Liftoff

    Though the U.S. economy is once again underperforming expectations, as it has for the past five years, the economy is ready for a (Fed) interest rate hike.
  10. Fundamental Analysis

    Calculating Book Value of Equity Per Share (BVPS)

    Book value of equity per share compares the total shareholder equity, as stated in the company’s balance sheet, to the total number of shares outstanding.

You May Also Like

Hot Definitions
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  4. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  5. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  6. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
Trading Center