What are Quintiles?
A quintile is one of five equal parts.
How Do Quintiles Work?
For example, if we were to look at all of the closing prices for Company XYZ stock for every day in the last year, the top 20% of those prices would represent the upper quintile of the data. The bottom 20% of those prices would represent the lower quintile of the data. There would be three quintiles in between the upper and lower quintiles. The average of all the stock prices typically falls right in the middle, between the second and fourth quintiles.
Why Do Quintiles Matter?
Quintiles are crucial for studying economic data, income data, data, and virtually any other kind of financial information. By breaking things into quintiles, an analyst can make a variety of inferences about the data and how the observed item behaves.