What is a 'ZTest'
A Ztest is a statistical test used to determine whether two population means are different when the variances are known and the sample size is large. The test statistic is assumed to have a normal distribution and nuisance parameters such as standard deviation should be known in order for an accurate ztest to be performed.
BREAKING DOWN 'ZTest'
A onesample location test, twosample location test, paired difference test and maximum likelihood estimate are examples of tests that can be conducted as ztests. Ztests are closely related to ttests, but ttests are best performed when an experiment has a small sample size. Also, ttests assume that the standard deviation is unknown, while ztests assume that it is known. If the standard deviation of the population is unknown, the assumption that the sample variance equals the population variance is made.

TTest
A statistical examination of two population means. A twosample ... 
Analysis Of Variance  ANOVA
A statistical analysis tool that separates the total variability ... 
Standard Error
The standard deviation of the sampling distribution of a statistic. ... 
Sample
A subset containing the characteristics of a larger population. ... 
Sampling Distribution
A probability distribution of a statistic obtained through a ... 
Variance
The spread between numbers in a data set, measuring Variance ...

Trading
What's a TTest?
TTest is a term from statistics that allows for the comparison of two data populations and their means. The test is used to see if the two sets of data are significantly different from one another. ... 
Investing
Explaining Standard Error
Standard error is a statistical term that measures the accuracy with which a sample represents a population. 
Markets
Explaining Variance
Variance is a measurement of the spread between numbers in a data set. 
Trading
Trading With Gaussian Models Of Statistics
The entire study of statistics originated from Gauss and allowed us to understand markets, prices and probabilities, among other applications. 
Markets
What is a Representative Sample?
In statistics, a representative sample accurately represents the makeup of various subgroups in an entire data pool. 
Markets
Explaining the Empirical Rule
The empirical rule provides a quick estimate of the spread of data in a normal statistical distribution. 
Trading
Understanding Statistics
Statistics provide the means to analyze data and then summarize it into a numerical form. 
Markets
How to Use Stratified Random Sampling
Stratified random sampling is a technique best used with a sample population easily broken into distinct subgroups. Samples are then taken from each subgroup based on the ratio of the subgroup’s ... 
Managing Wealth
Calculating Portfolio Variance
Portfolio variance is a measure of a portfolio’s volatility, and is a function of two variables. 
Investing
A Simplified Approach To Calculating Volatility
Volatility is sometimes greater than anticipated, but the way it’s measured can compound the problems that occur when it’s unexpected.

What assumptions are made when conducting a ttest?
Learn what a ttest is, and discover the five standard assumptions that are made regarding the validity of sampling and data ... Read Answer >> 
What is the difference between variance and standard deviation?
Explore the differences between standard deviation and variance. Learn more about how statisticians use these two concepts. Read Answer >> 
What is the difference between standard deviation and variance?
Understand the difference between standard deviation and variance; learn how each is calculated and how these concepts are ... Read Answer >> 
How is standard deviation used to determine risk?
Understand the basics of calculation and interpretation of standard deviation and how it is used to measure risk in the investment ... Read Answer >> 
What is the difference between standard deviation and average deviation?
Understand the basics of standard deviation and average deviation, including how each is calculated and why standard deviation ... Read Answer >> 
Is variance good or bad for stock investors?
Learn how high variance stocks are good for some investors and how diversified portfolios can reduce variance without compromising ... Read Answer >>