What Is a Statistical Model? Overview and Example

By Kristi Waterworth – Updated Nov 3, 2025 at 2:14 PM | Fact-checked by Frank Bass

Key Points

Statistical models predict stock trends using historical data and mathematical equations.
Common statistical models include regression, time series, and risk assessment tools.
Effective use depends on accurate data and assumptions, minimizing bias.

There are a lot of different ways to think about stocks, but many are made possible by tools like a statistical model. Using both quantitative and qualitative techniques to evaluate the potential of any given investment can help you make a well-rounded decision about your financial future, and they can act as checks on each other. Read on to learn more about statistical models.

Loading paragraph...

Papers showing line, bar, and pie charts — Image source: Getty Images.

Loading image...

Loading paragraph...

Loading pitch...

Loading paragraph...

Related investing topics

Loading paragraph...

AI Adoption Statistics: How Many Businesses Are Using AI?

AI adoption rates show which types of businesses and which parts of the country are incorporating AI the most.

How to Analyze Bank Stocks

Want to bank on this industry? Learn how to value these stocks here.

How to Research Stocks

Good research can help investors find the best companies to invest in.

Essential Financial Formulas You Should Know

If you're going to become an investor, there are a few things you should know — like these formulas. Keep reading to learn more.

Loading hub_pages...

Loading paragraph...

Loading pitch...

About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

TMFMaldivesBlue

@MaldivesBlues

The Motley Fool has a disclosure policy.