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What Is a Tracking Signal? How Can Managers Use the Information

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Essay

What is a tracking signal? How can managers use the information provided by the tracking signal to improve the quality of forecasts?


Definitions:

Regression Toward The Mean

The tendency for extreme or unusual scores or events to fall back (regress) toward the average.

Unusual Scores

Scores that significantly deviate from the norm or average in any type of assessment, indicating atypical performance or results.

Average

A statistical measure representing the central tendency or typical value of a set of numbers, calculated as the sum of the values divided by the number of values.

Correlation Coefficients

Statistical measures that describe the direction and degree of relationship between two or more variables.

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