Sampling bias

A deceptive force that distorts the truth, sampling bias occurs when the selection of a sample from a population is not truly representative, leading to skewed results and jeopardizing the validity and generalizability of findings in studies and analyses across various domains, including finance.

Example

In a financial market research study, if the sample of stocks analyzed is primarily drawn from a single industry or market segment, the conclusions may not accurately reflect the overall market trends and dynamics. To avoid sampling bias, researchers must ensure that their sample selection process is robust and representative of the broader population, allowing for more accurate and reliable insights that can be generalized to the wider financial market.