heteroskedasticity

Heteroskedasticity is a statistical property of a data set that measures how much variation there is in the distribution of the residuals from a linear regression model. Such a data set will have more outliers than one with homoskedasticity.

Graphic examples of skedasticity (heteroskedasticity and homoskedasticity).

Skedasticity and Finiac

Skedasticity is a measure of deviation from the expected results of a particular data set. This is useful when looking at the performance of a financial asset because it tells you a lot about the volatility of that asset.

Volatility, for us, is a core metric that we use to think about potential investments.

We favor histograms, like the two examples in the graphic above.

Graphic example explaining how to read a histogram chart.