Input Data Modeling and Histograms

Flashcards covering key concepts related to input data modeling, histograms, distribution types, parameter estimation, and goodness-of-fit tests.

Input data modeling

The process of collecting and analyzing input data to increase the accuracy of a simulation.

Histogram

A graphical representation that organizes data points into user-specified ranges, displaying the frequency distribution of variables.

What does a MACD histogram help traders monitor?

Stock values in the market.

Name some of the distribution types used in input data modeling.

Exponential, Lognormal, Normal, Gamma, Poisson, Beta, Binomial, Weibull, Triangular, and Uniform distributions.

What does the Exponential Distribution concern?

The amount of time until a specific event occurs, with large values being less frequent than small values.

What is the Normal Distribution?

A symmetric probability distribution where data near the mean occur more frequently, creating a bell-shaped curve.

What is Poisson Distribution?

Distribution used to show how many times an event is likely to occur within a specified period of time.

What are the factors for family of distribution selection?

Context of the input variable and shape of the histogram

What is the physical basis for exponential distribution?

The time between independent events.

What is the physical basis for normal distribution?

The distribution of a process that is the sum of component processes.

What is the physical basis for poisson distribution?

The number of independent events that occur in a fixed time or space.

What is the physical basis for binomial distribution?

The number of successes in n trials.

What is the physical basis for triangular distribution?

A process where the minimum, most likely, and maximum values are known.

Parameter estimation

The process of approximating the model parameters based on the model’s response to certain test inputs.

Goodness-of-fit test

A statistical hypothesis test to see how well sample data fit a distribution.

Name two commonly used methods for determining the goodness-of-fit.

Chi-Square Test and Kolmogorov-Smirnov Test

Chi-Square Test

Tests the validity of a claim made about a population based on a random sample.

Kolmogorov-Smirnov Test

Determines whether a sample is from a specific distribution within the population.