# What does it mean when the skewness is negative?

## What does it mean when the skewness is negative?

Understanding Skewness These taperings are known as “tails.” Negative skew refers to a longer or fatter tail on the left side of the distribution, while positive skew refers to a longer or fatter tail on the right. Negatively-skewed distributions are also known as left-skewed distributions.

What does a negatively skewed distribution imply?

Negatively skewed distribution refers to the distribution type where the more values are plotted on the right side of the graph, where the tail of the distribution is longer on the left side and the mean is lower than the median and mode which it might be zero or negative due to the nature of the data as negatively …

### Is negative skewness good?

A negative skew is generally not good, because it highlights the risk of left tail events or what are sometimes referred to as “black swan events.” While a consistent and steady track record with a positive mean would be a great thing, if the track record has a negative skew then you should proceed with caution.

Do investors prefer negative or positive skewness?

The positively skewed distributions of investment returns are generally more desirable by investors since there is some probability to gain huge profits that can cover all the frequent small losses.

#### How do you tell if a distribution is skewed?

A distribution is skewed if one of its tails is longer than the other. The first distribution shown has a positive skew. This means that it has a long tail in the positive direction. The distribution below it has a negative skew since it has a long tail in the negative direction.

What is an example of skewed distribution?

Here are some real-life examples of skewed distributions. Left-Skewed Distribution: The distribution of age of deaths. The distribution of the age of deaths in most populations is left-skewed. Most people live to be between 70 and 80 years old, with fewer and fewer living less than this age.