Home > Term: mean reversion
mean reversion
The tendency for subsequent observations of a random variable to be closer to its mean than the current observation. For example, if the current number is 7, the average is 5, and there is mean reversion, then the next observation is likelier to be 6 than 8.
- Part of Speech: noun
- Industry/Domain: Economy
- Category: Economics
- Company: The Economist
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- summer.l
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