Z-score
How many standard deviations a value is above or below the average. It lets you compare results measured in completely different units.
In plain English
Subtract the average from the value, then divide by the standard deviation. A z-score of 0 is exactly average, 2 is unusually high, and minus 2 is unusually low. On a bell curve, a z-score of 2 beats about 98% of values.
Uncle Gary explains
Cousin Kevin got 72 in statistics (class average 60, standard deviation 6) and 80 in history (average 75, standard deviation 10). The z-scores are 2 and 0.5, so the lower mark was the better result. Kevin now describes himself as statistically gifted.
Why it matters for your money
Saying how many standard deviations a result is from normal is the quickest way to tell a remarkable result from everyday noise.
Where we tested it
Related terms
All glossary terms. Educational content, not financial advice.