stochastic dominance

Stochastic dominance refers to the use of historical empirical data to support future projections in terms of probability. It is a form of stochastic ordering.

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Stochastic dominance refers to one data set's dominance over another relative to the value of the outcomes. For example, when comparing the relative value of two investments (asset A and asset B), the one whose probable rate of return exceeds the other, at any level, is stochastically dominant.