Runs Test

DEFINITION of 'Runs Test'

A statistical procedure that examines whether a string of data is occurring randomly given a specific distribution. The runs test analyzes the occurrence of similar events that are separated by events that are different.


For example, a list of truly random single-digit numbers should only have a few instances where a sequence of numbers is ascending numerically. However, in many cases, it is difficult to assert the randomness of data in which there are thousands of sequences in a string of data, so the runs test was created as an objective method of determining randomness.

The runs test model is important in determining whether an outcome of a trial is truly random, especially in cases where random versus sequential data has implications for subsequent theories and analysis.

  1. Random Factor Analysis

  2. Data Smoothing

  3. Random Walk Theory

  4. Simple Random Sample

  5. Random Variable

  6. Log-Normal Distribution

Related Articles
  1. Active Trading

    Random Reinforcement: Why Most Traders Fail

  2. Fundamental Analysis

    Understanding the Simple Random Sample

  3. Fundamental Analysis

    Financial Markets: Random, Cyclical Or Both?

  4. Options & Futures

    Financial Concepts: Random Walk Theory

  5. Investing Basics

    What Are The Odds Of Scoring A Winning Trade?

  6. Investing Basics

    Understanding the Random Walk Theory

  7. Active Trading

    Viewing The Market As Organized Chaos

  8. Fundamental Analysis

    Monte Carlo Simulation With GBM

    Learn to predict future events through a series of random trials.
  9. Professionals

    Common Probability Distributions

    CFA Level 1 - Common Probability Distributions - Basics
  10. Fundamental Analysis

    Find The Right Fit With Probability Distributions


  2. What are the best selection methods for creating a simple random sample?

    Discover some of the methods that researchers and pollsters utilize to select a simple random sample from a population group ... Read Answer >>

  4. What are some examples of stratified random sampling?

    Learn what simple random sampling and stratified random sampling are, some examples of stratified random samples, and how ... Read Answer >>

  6. What is the criteria for a simple random sample?

    Discover the criterion for taking a simple random sample, in contrast to a systematic random sample, each person selected ... Read Answer >>
Hot Definitions
  1. Yield Curve

  2. Stop-Limit Order

  3. Keynesian Economics

  4. Society for Worldwide Interbank Financial Telecommunications ...

  5. Generally Accepted Accounting Principles - GAAP

  6. DuPont Analysis

Trading Center