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In plotting a Histogram, Kurtosis describes the distribution and measures the outlying observations relative to the Mean, in terms of Standard Deviation. The extreme tail values will be + / – 3 Standard Deviations.

Kurtosis is a statistical measure used in describing the characteristics of a distribution and measures extreme values in either tail. In plotting a Histogram there is the general idea about the numerical measures of center, spread and outliers, which can give a general idea about the shape of the Histogram. Kurtosis is one of two numerical measures. The other is Skewness, which gives a more precise evaluation of the shape of the curve. Kurtosis is the fourth moment, the outlying observations relative to the Mean, the extreme tail values. The Kurtosis is measured as a multiple of the levels of Standard Deviation, around +/- 3 from the Mean. In investing in stocks, a high Kurtosis represents extreme returns. Negative Kurtosis needs to be hedged, to prevent the downside. Hedging these risks can be expensive.


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Warren William

Meet the author behind Smartest-Data. Warren William has a career in Finance and Investments extending over 35 years, both on the Buy Side and Sell Side. His most recent roles include, developing Institutional Risk Management Programs for managing Equity and Fixed Income Risk.  Prior to this Warren William work in Alternative Investments, in Investment Management and as a Buy Side Equity Analyst. Warren William brings a wealth of knowledge and expertise to the table, providing in-depth analysis and commentary on the latest trends in the Stock Markets. Contact information: or Telegram +393339034488

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