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.

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