We are 164-98=62.5%=$57,800 profit
Whatever you track and measure you improve the performance 10 to 20%
"Return to the mean"
is a concept in statistics that refers to the phenomenon where, over time, extreme or unusual observations tend to move closer to the average or mean value. It's also known as "regression to the mean" or simply "regression."
This phenomenon is often observed in situations where there is random variation or noise in data. Here's how it works:
Initial Observation: In a given dataset, you may have some data points that are exceptionally high or low, deviating significantly from the mean.
Repeated Observations: If you were to take additional measurements or observations of the same phenomenon, some of those new measurements are likely to be closer to the mean, even if the initial measurements were far from it.
Explanation: The return to the mean occurs because extreme values are often due to random fluctuations or variability. These extreme values are not likely to persist over time. As more data points are collected, the random noise tends to balance out, and the values converge toward the mean.
Example: Imagine you are tracking the performance of a group of students on a test. Some students may perform exceptionally well on the first test, while others perform poorly. However, when you administer a second test, you may find that the students who scored extremely well on the first test are less likely to do as well on the second test, and vice versa. This is an example of the return to the mean in action.
It's important to note that the return to the mean is a statistical concept and doesn't imply causation. Just because an extreme value regresses toward the mean doesn't mean that any specific action was taken to cause that regression. It's often a natural consequence of random variation in data.
Understanding the return to the mean is crucial in various fields, including finance, sports, and medicine, where it can help in making more informed decisions and avoiding the misinterpretation of data.
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