Statistically Significant

Filed Under » ,
Dictionary Says

Definition of 'Statistically Significant'

The likelihood that a result or relationship is caused by something other than mere random chance. Statistical hypothesis testing is traditionally employed to determine if a result is statistically significant or not. This provides a "p-value" representing the probability that random chance could explain the result. In general, a 5% or lower p-value is considered to be statistically significant.
Investopedia Says

Investopedia explains 'Statistically Significant'

This concept may sound confusing and impractical, but consider a simple example - suppose you work for a company that produces running shoes:

You need to plan production for the number of pairs of shoes your company should make in each size for men and for women. You don't want to base your production plans on the anecdotal evidence that men usually have bigger feet than women, you need hard data to base your plans on. Therefore, you should look at a statistical study that shows the correlation between gender and foot size.

If the report's p-value was only 2%, this would be a statistically significant result. You could reasonably use the study's data to prepare your company's production plans, because the 2% p-value indicates there is only a 2% chance that the connection between foot size and gender was the result of chance/error. On the other hand, if the p-value was 20%, it would not be reasonable to use the study as a basis for your production plans, since there would be a 20% chance that the relationship presented in the study could be due to random chance alone.
Search results for

'Statistically Significant'

  • The Market And Presidential Promises

    http://www.investopedia.com/articles/financial-theory/08/presidential-election-cycle.asp
    ... Election Cycle in the US Stock Market" by Wing-Keung Wong and Michael McAleer found
    that "there were statistically significant presidential election cycles in ...

  • For Higher Stock Returns, Vote Republican Or Democrat?

    http://www.investopedia.com/articles/financial-theory/08/political-party-democrat-republican-stock-returns.asp
    ... Business cycle fluctuations showed no correlation to the results, demonstrating
    statistically significant outperformance for the Democrats regardless of ...

  • Does Your Investment Manager Measure Up?

    http://www.investopedia.com/articles/pf/07/investment_manager_stats.asp
    ... 50. The longer the time period analyzed, the more statistically significant
    the measure becomes. Putting It All Together Example ...

  • Reduce Your Risk With ICAPM

    http://www.investopedia.com/articles/financial-theory/09/ICAPM-and-CAPM.asp
    ... found that small-cap stocks tended to outperform large-cap stocks in a statistically
    significant way, even after accounting for differences in beta. ...

  • Is Volcanic Ash Hurting Your Wallet? - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0711/Is-Volcanic-Ash-Hurting-Your-Wallet.aspx
    ... is that these eruptions have only taken place every 600,000 to 800,000 years, although
    the past three eruptions are not statistically significant to determine ...

  • Investors Intelligence Sentiment Index

    http://www.investopedia.com/articles/trading/03/100103.asp
    ... survey and future S&P 500 returns to be negative but not statistically significant"
    (published in the Mar/Apr 2000 issue of Financial Analysts Journal). ...

  • Naive Diversification Vs. Optimization

    http://www.investopedia.com/articles/stocks/11/naive-diversification-vs-optimization.asp
    ... The difference between them and the naive approach is not statistically significant;
    they point out that really basic models perform quite well. ...

  • The Curious And Complicated Case Of MannKind

    http://stocks.investopedia.com/stock-analysis/2010/The-Curious-And-Complicated-Case-Of-MannKind-MNKD-PFE-NKTR-SNY-NVO-BIOD-MDT1215.aspx
    ... In fact, every trial I have seen has shown a slight underperformance for Afrezza -
    not enough to be statistically significant or technically inferior, but ...

  • Chinese Stocks: One Reason Why You Shouldn't Doubt China

    http://stocks.investopedia.com/stock-analysis/2012/Chinese-Stocks-One-Reason-Why-The-China-Doubters-Are-Wrong-ACH-VIT-HOGS-NPD-CCSC0125.aspx
    ... potential. All of the Chinese stocks mentioned below have recorded statistically
    significant winning streaks over the last 30 days. For ...

  • Seasonal Trends In The Forex Market

    http://www.investopedia.com/articles/forex/07/forex_seasonality.asp
    ... that historical patterns will repeat themselves but whenever a pattern has been
    repeated 80-90% of the time, it becomes statistically significant – and that ...

Related Articles

Partner Links