Survivorship bias

The tendency to focus only on the successful

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Survivorship bias refers to the tendency to focus only on the successful outcomes or survivors in a particular study or analysis, while neglecting the failures or non-survivors. In investment and finance, survivorship bias can occur when analyzing historical data or performance of a specific group of assets, such as stocks or mutual funds. If the analysis only considers the assets that have survived or still exist in the present, it can lead to an overestimation of their performance or characteristics. This bias can skew the perception of the overall risk and return profile of the group being analyzed.