Glossary

Technical Foundations

Z-Score

The Z-score is a measure of how far a data point is away from the mean of a data set. In statistics, probability distributions measure the probability of an event given a mean and a standard deviation. One of the most commonly used distributions is the normal distribution or ‘bell-shaped curve’. There are an infinite number of them but all share the same characteristics in that approximately 68% of events will lie between +1 and -1 standard deviations from the mean. All those curves can be replicated by the standard normal curve which has a mean of zero and a standard deviation of 1. The Z-score measures a given point from its mean in terms of standard deviation. By knowing the z-score we can then determine the probabilities of events falling above or below that point.