Statistics for Investors and Traders
Probability, expected value, volatility, correlation, drawdown, Sharpe and Sortino ratios and regression, explained with worked examples and calculators.
The numbers behind every result. Probability, expected value, distributions and fat tails, volatility, correlation, drawdown math, the Sharpe and Sortino ratios, and regression, each with a worked example.
Lessons in this track
- Probability basics for trading Probability basics for trading: independent events, the real odds of a losing streak, the law of large numbers, and why small samples mislead.
- Expected value explained What expected value is, how to calculate EV per trade from win rate and average win and loss, and how to find the breakeven win rate. Worked examples.
- Distributions and fat tails in stock returns Why stock returns have fat tails: mean, median, skew and kurtosis explained, and why extreme days happen far more often than a bell curve predicts.
- Volatility and standard deviation Compute a sample standard deviation from five returns step by step, annualize it with the square root of time, and learn what volatility does not measure.
- Correlation and diversification Correlation in investing explained: compute a correlation coefficient by hand, see why diversification needs it below 1, and why it rises in sell-offs.
- Drawdown math and recovery Drawdown recovery math explained: the gain needed after any loss, how long recovery takes at a steady return, and why big swings drag on compounding.
- The Sharpe and Sortino ratios How the Sharpe ratio and Sortino ratio are calculated, a worked example of downside deviation, and why both can mislead on short or cherry-picked samples.
- Regression basics: beta and R squared Regression in finance explained: fit a stock's returns against an index by hand, read beta as the slope and R squared as the fit, and avoid overfitting.
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Agenticks Learn is general education. It is not financial, investment, tax or legal advice, it does not take your situation into account, and nothing on it is a recommendation to buy, sell or hold any security or to open any account. Examples use illustrative numbers. Investing involves risk, including losing money you put in, and past performance does not predict future results. Tax rules and limits change; the official sources linked in each lesson are the final word.