Outlier
A value far away from the rest of the data. Outliers can drag the mean a long way while barely moving the median.
In plain English
Sometimes an outlier is a mistake (someone typed 1000 instead of 10). Sometimes it's real and important (one billionaire, one market crash). Either way, it can change the picture completely, so it's worth spotting before you calculate anything.
Uncle Gary explains
A billionaire walks into Uncle Gary's local. The mean income in the pub jumps to about $100 million. The barman still won't let Gary run a tab.
Why it matters for your money
One huge winning trade can make a whole strategy look brilliant. Check how the results look without the single best one.
Where we tested it
- Lesson 2: The Average and Its Evil Twins
- Lesson 3: Spread: Same Average, Very Different Night
- Lesson 19: Percentiles, Quartiles and Box Plots: Reading a Distribution at a Glance
Related terms
All glossary terms. Educational content, not financial advice.