Statistics is the branch of mathematics and science that deals with collecting, organizing, analysing and interpreting data. It has two main parts. Descriptive statistics summarizes a data set with measures such as the mean, the standard deviation and the correlation between variables. Inferential statistics uses a sample to draw conclusions about a wider population, and attaches a measure of uncertainty to each conclusion through tools such as hypothesis testing and the confidence interval.
In financial markets, statistics is the working language of risk management and quantitative research. Volatility, correlation and value at risk are statistical estimates. A trading strategy is judged by asking whether its past returns are distinguishable from chance, and relationships between variables are estimated by linear regression and related methods. Market data are noisy and change in character over time, so conclusions drawn from them call for particular care. The field overlaps with data science.