Skewness And Kurtosis Definition. Because it is the fourth moment kurtosis is always positive. In finance kurtosis is used as a measure of financial risk financial risk modeling financial risk modeling is the process of determining how much risk is present in a particular business investment or series of cash flows.
Skewness is a measure of the symmetry in a distribution. Kurtosis tells you the height and sharpness of the central peak relative to that of a standard bell curve. Skewness and kurtosis are two commonly listed values when you run a software s descriptive statistics function.
Because of the 4th power smaller values of centralized values y i µ in the above equation are greatly de emphasized.
Skewness and kurtosis are two commonly listed values when you run a software s descriptive statistics function. Because of the 4th power smaller values of centralized values y i µ in the above equation are greatly de emphasized. Here x is the sample mean. Conversely kurtosis is a measure of degree of tailedness in the frequency distribution.
