Importance Of Kurtosis In Statistics. Skewness essentially measures the symmetry of the distribution while kurtosis determines the heaviness of the distribution tails. Kurtosis is a measure of the combined sizes of the two tails.
If there is a high kurtosis then we need to investigate why do we have so many outliers. In finance kurtosis is used as a measure of financial risk. Three different types of curves courtesy of investopedia are shown as follows.
Kurtosis is a measure of the combined sizes of the two tails.
Kurtosis is all about the tails of the distribution not the peakedness or flatness. It is used to describe the extreme values in one versus the other tail. Many books say that. Definition of kurtosis like skewness kurtosis is a statistical measure that is used to describe distribution.
