Investor Glossary-kurtosisInvestor Glossary-kurtosisInvestor Glossary-kurtosisInvestor Glossary-kurtosisInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Kurtosis

The HTML to link to this page
 

Kurtosis, of Greek origin meaning "bulging" or "swelling", is a measurement used to determine the peakedness of a data distribution. It essentially measures a bell curve. In other words, Kurtosis measures whether the data is sharp or flat relative to a normal distribution. Since Kurtosis measures the shape of the distribution (the fatness of the tails), it focuses on how returns are ranged around the mean. A Kurtosis coefficient of three indicates a normal distribution. Kurtosis of less than three indicates a low peak with a fat midrange on either side; this is referred to as platykurtic. Conversely, Kurtosis greater than three indicates a sharp/high peak with a thin midrange and fat tails; this is called leptokurtic. Therefore, put simply, Kurtosis describes how bunched around the center or spread at the endpoints a frequency distribution is. Investors can use the information of Kurtosis to describe trends found in the charts to assess volatility; sometimes Kurtosis is called "the volatility of volatility." Kurtosis is like skewness, except skewness only measures one tail's fatness.



Rate this Kurtosis definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: FICO score, dividends payable, VIX, average price per share, deferred tax, inflation, liquidity ratio, 144a, in escrow, per diem, command economy, annual return, open position, quality assurance, labor relations, stock market close, retained earnings, FTSE, Zero Cost Collar, diluted share, deferred revenue, debt service coverage, irrevocable trust, LIBOR, implied volatility, 401a, risk management, current ratio, 1035 exchange, option premium, EBITDA, Key Rate Duration, minority interest, wholly-owned subsidiary, required rate of return, cancelled check, real GDP, reverse mortgage, ex-dividend date, margin rate, APR, covered put, stock split, ex-dividend, class C shares, limit order, 1031 exchange, phantom income, balance sheet


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use