what is z score 
z score is a statistical measurement that describes a value s relationship to the mean of a group of values z score is measured in terms of standard deviations from the mean in investing and trading z scores are measures of an instrument s variability and can be used by traders to help determine volatility understanding z scorez score is a statistical measure that quantifies the distance between a data point and the mean of a dataset it s expressed in terms of standard deviations it indicates how many standard deviations a data point is from the mean of the distribution if a z score is 0 it indicates that the data point s score is identical to the mean score a z score of 1 0 would indicate a value that is one standard deviation from the mean z scores may be positive or negative with a positive value indicating the score is above the mean and a negative score indicating it is below the mean the z score is sometimes confused with the altman z score which is calculated using factors taken from a company s financial reports the altman z score is used to calculate the likelihood that a business will go bankrupt in the next two years while the z score can be used to determine how far a stock s return differs from it s average return and much more z score is also known as the standard score z score formulathe statistical formula for a value s z score is calculated using the following formula 