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Lesson 4 of 19

Relative Frequencies and Cumulative Relative Frequencies

There are several types of frequencies that provide different insights into your data:

  • Absolute Frequency: This is the simple count of observations in each category. In our example above, we can see that 6 observations fall into the interval 4 <= r < 6, representing the highest count in any single interval.
  • Relative Frequency: Relative frequency shows the proportion of observations in each category compared to the total observations. It's calculated by dividing the absolute frequency by the total number of observations. Relative frequencies are often expressed as percentages and always sum to 100%.
  • Cumulative Relative Frequency: This measure is particularly useful for understanding the distribution of data up to a certain point. It answers questions like "What percentage of observations fall below a certain value?" For instance, from our table below, we can see that 70% of all observations fall below 6.

The data in a frequency distribution can also be presented using relative frequencies.

rf1
rf1

Once we have relative frequencies, we can calculate cumulative relative frequencies where as we move from first frequency interval to the last, we keep adding the relative frequencies finally reaching 100%. Cumulative relative frequencies are useful in measuring what fraction of total observations are less than the upper limit of a frequency interval.

We will extend our example to show the relative frequencies and cumulative relative frequencies.

IntervalAbsolute FrequencyRelative FrequenciesCumulative Relative Frequencies
0 <= r < 233/20 = 15%15%
2 <= r < 455/20 = 25%40%
4 <= r < 666/20 = 30%70%
6 <= r < 822/20 = 10%80%
8 <= r < 1044/20 = 20%100%
 20100% 

The cumulative relative frequency is equal to the some of the relative frequencies of all the previous intervals including the current interval. For example, the cumulative absolute frequency for the interval 4 <= r < 6 is 15% + 25% + 30% = 70%.

Previous Lesson

Parameter, Sample Statistic, and Frequency Distribution

Next Lesson

Properties of a Data Set (Histogram / Frequency Polygon)

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Statistical Concepts and Market Returns

19 lessons

Lessons

1
Descriptive Vs. Inferential Statistics
2
Types of Measurement Scales
3
Parameter, Sample Statistic, and Frequency Distribution
4
Relative Frequencies and Cumulative Relative Frequencies
5
Properties of a Data Set (Histogram / Frequency Polygon)
6
Measures of Central Tendency
7
Calculating Arithmetic Mean
8
Calculating Weighted Average Mean
9
Calculating Geometric Mean
10
Calculating Harmonic Mean
11
Calculating Median and Mode of a Data Set
12
Quartiles, Quintiles, Deciles, and Percentiles
13
Range and Mean Absolute Deviation
14
Variance and Standard Deviation
15
Chebyshev’s Inequality
16
Coefficient of Variation
17
Sharpe Ratio
18
Skewness and Kurtosis
19
Relative Locations of Mean, Median and Mode

Quizzes

Statistical Concepts and Market Returns
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