




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...




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


 