10 Year Treasury Notes T-Bond Yield Forecast over the next Six Month. |
10 Year T-Note Forecast |
|
||||
|
|
What is the Standard Deviation? The standard deviation a concept from statistics is a measure of the amount of variation or deviation that might be expected between the actual indicator value and the forecasted value. And it is given in the same units as the indicator. As an example retail sales' forecasts are given in U.S. dollars and thus the standard deviation is also in U.S. dollars. Given a forecasted value and a standard deviation the possible range of actual values can be found. From statistics there is a 68% chance that the actual value will be either one standard deviation above or one standard deviation below the forecasted value or +/- 1 standard deviation. It also works out that there is a 95% chance the actual value will be within +/- 2 standard deviations and there is a 99.7% chance the actual value will be within +/- 3 standard deviations. Statistics also says there is always some small chance the actual value can be any number of standard deviations from the forecasted value but usually the actual value will be within 3 standard deviations of the forecasted value. Thus the standard deviation is a very concise and powerful way of conveying the amount of uncertainty in the forecasts. The smaller the standard deviation the less the uncertainty. As an example lets say the Dow Jones Industrial Average is forecasted at 10 000 points and the standard deviation is 200 points. From this the following can be found: I. There is a 68% chance the Dow will fall between 9 800 and 10 200. II. There is a 95% chance the Dow will fall between 9 600 and 10 400 and III. There is a 99.7% chance the Dow will fall between 9 400 and 10 600. IV. There is some very small chance (about 3 in one million) the Dow will fall between 8 800 and 11 200
Refer This Page To a Friend
Current
Money Rates Indicator Value |
||||||||||||||||||||||
| © 1997-2005. Financial Forecast Center, LLC. All Rights Reserved. |