# What is Mean in Statistics?

Mean is the simple mathematical average of a set of two or more numbers. The mean for a given set of numbers can be computed in more than one way, including the arithmetic mean method, which uses the sum of the numbers in the series, and the geometric mean method, which is the average of a set of products. However, all of the primary methods of computing a simple average produce the same approximate result most of the time.

• The mean is the mathematical average of a set of two or more numbers.
• The arithmetic mean and the geometric mean are two types of mean that can be calculated.
• The arithmetic mean is calculated by summing the numbers in a set and dividing by the total quantity of numbers.
• The geometric mean is more complicated and involves the multiplication of the numbers taking the nth root.
• The mean helps to assess the performance of an investment or company over a period of time, macroeconomic conditions, or how current financial conditions compare to prior periods.

Understanding Mean:

The mean is a statistical indicator that can be used to gauge performance over time. Specific to investing, the mean is used to understand the performance of a company’s stock price over a period of days, months, or years.

An analyst who wants to measure the trajectory of a company’s stock value in the last, say, 10 days, would sum up the closing price of the stock in each of the 10 days. The sum total would then be divided by the number of days to get the arithmetic mean. The geometric mean will be calculated by multiplying all of the values together. The nth root of the product total is then taken, in this case, the 10th root, to get the mean.