FTB-C000175 / Formula component

Standardized Score

A standardized score expresses a value relative to a declared center and scale, commonly as deviations from a mean.

Also known asz-scorestandard score

Intermediate Formula defined 1 linked topicPublished

Definitions

In plain terms

A z-score of 1 means the observation is one selected standard deviation above the selected mean.

Technical

The conventional z-score subtracts the population or sample center and divides by a nonzero scale, with explicit cross-section, winsorization, grouping, and missing-value rules.

Scope

Standardization does not make a distribution normal or remove outliers automatically.

Formula

z = (x - mu) / sigma
LaTeX: z=(x-\mu)/\sigma
SymbolMeaningUnit
xobserved valueinput unit
mudeclared centerinput unit
sigmadeclared positive scaleinput unit

Output unit: standard deviations

Examples

  • A governed methodology records standardized score with its source, cutoff, units, parameters, and effective version.

Common misconceptions

  • Standardized Score does not have one universal implementation without the declared methodology, data basis, and constraints.

Concept relationships

Related

Where this concept is used

Tutorials planned

These catalogued topics use this concept, but their complete build has not shipped yet.

  • D03-F03-A03 Important

Evidence and governance

  1. Fintech Builder Glossary Definition Contract The Fintech Builder · internal governed contract

    Supports: preferred label, short definition, technical definition, formula

    Limits: Defines governed platform behavior rather than claiming these policies are universally prescribed by external McClellan methodology.

Reviewed by
fintech-builder-batch-004
Last reviewed
2026-07-27
Next review
2027-07-27
Record status
published
Written by

Fintech engineer building market-data and financial systems, and the author of every article, glossary record, and reference implementation on The Fintech Builder.