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Organizing Data for Quantitative Analysis

Posted on February 12, 2021February 11, 2021 by financialeducation

Data must typically be cleanly formatted to be useful for quantitative analysis. Depending on the number of variables, it can be arranged into one-dimensional arrays or two-dimensional rectangular arrays.

A one-dimensional array is the easiest way to represent a collection of data on a single variable. For example, the daily closing price for shares of Apple can be organized according to time and easily updated as new data are collected. Because it is organized by time, it can be plotted to show direction and trends as well as basic descriptive statistics such as the mean and standard deviation.

A two-dimensional array, or data table, is a popular way to present data for human consumption. In this format, each column typically represents a variable and each row represents an observation for that variable. The variables could represent one entity (various economic statistics for the United States over time) or multiple (the GDP growth rates of all countries in Europe over time).

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