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Investments glossary

Nonparametric Method


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I\'m in favor of legalizing drugs. According to my values system, if people want to kill themselves, they have every right to do so. Most of the harm that comes from drugs is because they are illegal.

— Milton Friedman

Nonparametric method refers to a type of statistic that does not require that the population being analyzed meet certain assumptions, or parameters. Well-known statistical methods such as ANOVA, Pearson’s correlation, t test, and others provide valid information about the data being analyzed only if the underlying population meets certain assumptions. One of the most common assumptions is that the population data have a normal distribution.

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