Standard Error

AAA

DEFINITION of 'Standard Error'

The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the accuracy with which a sample represents a population. In statistics, a sample mean deviates from the actual mean of a population; this deviation is the standard error.

INVESTOPEDIA EXPLAINS 'Standard Error'

The term "standard error" is used to refer to the standard deviation of various sample statistics such as the mean or median. For example, the "standard error of the mean" refers to the standard deviation of the distribution of sample means taken from a population.


The smaller the standard error, the more representative the sample will be of the overall population. The standard error is also inversely proportional to the sample size; the larger the sample size, the smaller the standard error because the statistic will approach the actual value.

RELATED TERMS
  1. Variance

    The spread between numbers in a data set, measuring Variance ...
  2. Mean

    The simple mathematical average of a set of two or more numbers. ...
  3. Standard Deviation

    1. A measure of the dispersion of a set of data from its mean. ...
  4. Sampling Error

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

    A process used in statistical analysis in which a predetermined ...
  6. Compound Annual Growth Rate - CAGR

    The year-over-year growth rate of an investment over a specified ...
Related Articles
  1. Find The Highest Returns With The Sharpe ...
    Bonds & Fixed Income

    Find The Highest Returns With The Sharpe ...

  2. Understanding Volatility Measurements ...
    Mutual Funds & ETFs

    Understanding Volatility Measurements ...

  3. Monte Carlo Simulation With GBM
    Fundamental Analysis

    Monte Carlo Simulation With GBM

  4. Stock Market Risk: Wagging The Tails
    Mutual Funds & ETFs

    Stock Market Risk: Wagging The Tails

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center