Asymmetrical Distribution

DEFINITION of 'Asymmetrical Distribution'

A situation in which the values of variables occur at irregular frequencies and the mean, median and mode occur at different points. An asymmetric distribution is said to exhibit skewness. In contrast, a symmetric or normal distribution, when depicted on a graph, is shaped like a bell curve and the two sides of the graph are symmetrical.

BREAKING DOWN 'Asymmetrical Distribution'

Investment return data commonly has an asymmetric distribution. This occurs because investment performance is often skewed since investments experience periods of abnormally high and abnormally low performance, and because sample investment performance data are always changing. Investors should consider all of these factors when attempting to gauge investment volatility by using the standard deviation.



RELATED TERMS
  1. Symmetrical Distribution

    A situation in which the values of variables occur at regular ...
  2. Bell Curve

    The most common type of distribution for a variable. The term ...
  3. Normal Distribution

    A probability distribution that plots all of its values in a ...
  4. Skewness

    Describe asymmetry from the normal distribution in a set of statistical ...
  5. Line Graph

    A graph that measures change over time by plotting individual ...
  6. Asymmetric Information

    A situation in which one party in a transaction has more or superior ...
Related Articles
  1. Investing

    What a Normal Distribution Means

    Normal distribution describes a symmetrical data distribution, where most of the results lie near the mean.
  2. Markets

    What is a Bell Curve?

    The bell curve is the most common type of graphed data distribution.
  3. Trading

    Trading With Gaussian Models Of Statistics

    The entire study of statistics originated from Gauss and allowed us to understand markets, prices and probabilities, among other applications.
  4. Trading

    What's Skewness?

    Skewness describes how a data distribution leans.
  5. Investing

    A Simplified Approach To Calculating Volatility

    Volatility is sometimes greater than anticipated, but the way it’s measured can compound the problems that occur when it’s unexpected.
  6. Markets

    What Does Asymmetric Information Mean?

    Asymmetric information describes a situation where one party in a transaction knows more than the other.
  7. Investing

    Find The Right Fit With Probability Distributions

    Discover a few of the most popular probability distributions and how to calculate them.
  8. Managing Wealth

    Using Normal Distribution Formula To Optimize Your Portfolio

    Normal or bell curve distribution can be used in portfolio theory to help portfolio managers maximize return and minimize risk.
  9. Investing

    Options Risk Graphs: Visualizing Profit Potential

    With a single diagram, you can see how price, time and volatility affect potential gains.
  10. Trading

    Bet Smarter With The Monte Carlo Simulation

    This technique can reduce uncertainty in estimating future outcomes.
RELATED FAQS
  1. How do financial market exhibit asymmetric information?

    Understand how financial markets exhibit asymmetric information. Learn how asymmetric information by any party can result ... Read Answer >>
  2. How significant is asymmetric information risk?

    Learn about the presence of asymmetric information risk in the financial markets and how various parties present or are exposed ... Read Answer >>
  3. Do any markets not exhibit asymmetric information?

    Find out why every market possesses information asymmetry, and why this isn't necessarily a huge or insurmountable problem ... Read Answer >>
  4. How are Symmetrical Triangle patterns interpreted by analysts and traders?

    Understand the basics of the symmetrical triangle and how analysts and traders interpret this continuation pattern when establishing ... Read Answer >>
  5. How do I implement a forex strategy when spotting a Symmetrical Triangle Pattern?

    Learn the basics of the symmetrical triangle pattern and how this continuation signal can be used to create trade strategy ... Read Answer >>
  6. How effective is creating trade entries after spotting a Symmetrical Triangle pattern?

    Understand the symmetrical triangle pattern and the likely success of the most common breakout trading strategy implemented ... Read Answer >>
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  3. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  4. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  5. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  6. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
Trading Center