Two-Way ANOVA

DEFINITION of 'Two-Way ANOVA'

A statistical test used to determine the effect of two nominal predictor variables on a continuous outcome variable. A two-way ANOVA test analyzes the effect of the independent variables on the expected outcome along with their relationship to the outcome itself. Random factors would be considered to have no statistical influence on a data set, while systematic factors would be considered to have statistical significance.

BREAKING DOWN 'Two-Way ANOVA'

An ANOVA test is the first step in identifying factors that influence a given outcome. Once an ANOVA test is performed, a tester may be able to perform further analysis on the systematic factors that are statistically contributing to the data set's variability. ANOVA test results can then be used in an F-test on the significance of the regression formula overall.

RELATED TERMS
  1. Variance

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

    A statistical test used to determine whether or not different ...
  3. Residual Standard Deviation

    A statistical term used to describe the standard deviation of ...
  4. Analysis Of Variance - ANOVA

    A statistical analysis tool that separates the total variability ...
  5. Regression

    A statistical measure that attempts to determine the strength ...
  6. Kurtosis

    A statistical measure used to describe the distribution of observed ...
Related Articles
  1. Investing Basics

    Regression Basics For Business Analysis

    This tool is easy to use and can provide valuable information on financial analysis and forecasting. Find out how.
  2. Options & Futures

    Bettering Your Portfolio With Alpha And Beta

    Increase your returns by creating the right balance of both these risk measures.
  3. Active Trading

    The Linear Regression Of Time and Price

    This investment strategy can help investors be successful by identifying price trends while eliminating human bias.
  4. Investing

    How to Prepare for the Low Return Environment Ahead

    Learn about the big takeaway from this week’s chart: Investors aiming for higher returns over the next five years should be prepared to stomach more volatility.
  5. Active Trading Fundamentals

    SandRidge's 3 Key Financial Ratios (SDOC)

    Learn more about SandRidge Energy, Inc., a history of the company's performance and financial stability through key financial ratios and its future outlook.
  6. Economics

    A Statistic About the U.S. Economy that May Surprise You

    Learn why many commentators seem to be pessimistically focused on the U.S. economy’s weak wage growth and manufacturing sector trouble.
  7. Economics

    The Current Probability of President Donald Trump

    Predict the current odds of a Donald Trump presidency, and understand the factors that have kept him on top and the looming challenges he faces.
  8. Fundamental Analysis

    Calculating the Coefficient Of Variation (CV)

    Coefficient of variation measures the dispersion of data points around the mean, a statistical average.
  9. Markets

    The Market Chart You Need to See This Week

    This week’s chart helps show why current low levels of stock market volatility look unsustainable and why now is a good time to prepare portfolios for a rockier road ahead.
  10. Economics

    Explaining Pareto Efficiency

    Pareto efficiency is an economic state where resources are allocated in the most efficient manner.
RELATED FAQS
  1. Do plane tickets get cheaper closer to the date of departure?

    Read about when to buy flights. See how statistics can predict optimal pricing. Read about price volatility over time. Learn ... Read Answer >>
  2. Is Colombia an emerging market economy?

    Learn the definition of an emerging market economy, and understand how Colombia, while not yet developed, meets the standards ... Read Answer >>
  3. What assumptions are made when conducting a t-test?

    Learn what a t-test is, and discover the five standard assumptions that are made regarding the validity of sampling and data ... Read Answer >>
  4. What are some of the more common types of regressions investors can use?

    Learn about the most common types of regressions investors use to model asset prices including linear regressions and multiple ... Read Answer >>
  5. What types of assets lower portfolio variance?

    Learn what type of assets reduce portfolio variance and how modern portfolio theory uses correlation coefficients. Read Answer >>
  6. When is it better to use systematic over simple random sampling?

    Learn when systematic sampling is better than simple random sampling, such as in the absence of data patterns and when there ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center