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Chebyshev's theorem, no matter what the form of the distribution, the
proportion of measurements lying within k standard deviation of the mean is
at least 1 - 1/k(squared), where k is any positive number larger than one.
3 = or 1 deviations is equal 1 - 1/3(squared) = 89%
If we are dealing only with bell shaped normal distributions the Empirical
rule applies. Use of the Empirical rule requires the data set approach the
form of a normal curve. To determine that a useful quantitative estimate of
skew (sk) is required an it can be provided by Pearsons coefficient of skew.
It expresses the deviation between the mean in terms of the standard
deviation,
sk = 3(Mean-Median)/s s being the standard deviation.
Some software packages allow the individual to measure a data set an
determine the Pearons coefficient. Data sets with the coefficient between +
or - .50 are considered symmetrical.
So the answer depends a bit on the data set.
As shown above for "any" distribution, 3 standard deviations should contain
89% however if the data set is normal, 3 standard deviations contain 99.7 %
(2 contain 95% and 1 contains 68%).
don ewers
----- Original Message -----
From: "Alberto Torchio" <atorchio@xxxxxxxxx>
To: "Realtraders" <realtraders@xxxxxxxxxxx>
Sent: Monday, October 23, 2000 2:27 AM
Subject: [RT] Simple question on Bollinger Bands
> Dear Listmembers,
>
> I have been asked a simple question on Bollinger Bands and was unable to
> answer...
> Could anyone tell me the number of standard deviations allowing to contain
> within the bands 90% of price data?
>
> Alberto Torchio
> Torino, Italy
>
>
>
> To unsubscribe from this group, send an email to:
> realtraders-unsubscribe@xxxxxxxxxxx
>
>
>
>
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