What should the ideal standard deviation be

When the standard error increases, i. Standard error increases when standard deviation, i. Standard error decreases when sample size increases — as the sample size gets closer to the true size of the population, the sample means cluster more and more around the true population mean. Your email address will not be published.

How do you then determine the sample size with the most minimal acceptable standard error. Because you need to have obtained the sample before you can determine standard deviation? I was not able to understand standard error. The procedures for calculating is given but i cant understand the process of calculation.

Standard Deviation is the square root of variance, so its kind of trivial to state the conclusion about the increasing standard error with respect to standard error.

Also please look into the symbol of sigma mentioned in the explanation of standard error. Thank you for flagging the symbol errors on the page Rohit. These have been updated now. Many thanks, Emma. Hi, Thank you! The denominator should be n Hi Wesley. Thank you for the comment. Also, as with any statistical model, large data sets are more reliable than small data sets. The 4. Bollinger Bands. Advanced Technical Analysis Concepts. Financial Analysis. Tools for Fundamental Analysis.

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We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Investing Portfolio Management. Key Takeaways Standard deviation can show the consistency of an investment's return over time. A fund with a high standard deviation shows price volatility.

A fund with a low standard deviation tends to be more predictable. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

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But I could also imagine that either he averaged over different questions or did something wrong in his calculations. It seems hard to imagine that people did really respond so uniformly, especially when talking about their supposed abilities. Add a comment. Active Oldest Votes. What is the purpose of your test?

Who are in the sample? Improve this answer. Peter Flom Peter Flom On the other hand, if you're concerned with precision of a measurement, then a large standard deviation is "bad". I'm guessing the original poster's interest is closer to the former but it's not clear. Ian Boyd Ian Boyd 1, 1 1 gold badge 11 11 silver badges 13 13 bronze badges. From there, you can calculate the numbers arbitrarily exactly by evaluating the integral over the normal pdf withing the boundaries given by the sd around the mean.

Really not helpful here. Featured on Meta. Now live: A fully responsive profile. Related 2. Hot Network Questions.