The t-statistic is the correct tool for trend detection, while z-scores work for point anomalies. Z-scores fail for trends because they mix signal into the noise denominator by using raw standard deviation, which includes both systematic trends and random fluctuations. The t-statistic addresses this by using standard error
•22m read time• From towardsdatascience.com
Table of contents
IntroductionZ-Scores: When they stop workingHypothesis Testing Basics: Rejecting the Null, Not Proving the AlternativeThe Signal-to-Noise Principle: Connecting Z-Scores and t-StatisticsWhen Z-Scores Break: The Trend ProblemAlternatives and Extensions: When t-Statistics Are Not EnoughIn ConclusionCodeReferences and Further ReadingSort: