Glossary term
Statistical Significance
Evidence that an observed result is unlikely to be random noise.
Statistical significance asks whether a result is strong enough, relative to its sample size and variability, that it is unlikely to be a coincidence. In investing, it helps separate a real edge from a lucky backtest.
Example: A strategy that wins in 8 months out of 10 is not enough evidence. A strategy tested across many years, markets, and regimes gives more confidence.