DEFINITION of 'Coskewness'
A statistical measure that calculates the symmetry of a variable's probability distribution in relation to another variable's probability distribution symmetry. All else being equal, a positive coskewness means that the first variable's probability distribution is skewed to the right of the second variable's distribution.
BREAKING DOWN 'Coskewness'
In finance, coskewness can be used as a supplement to the covariance calculation of risk estimation. Usually, coskewness is calculated using a security's historic price data as the first variable, and the market's historic price data as the second. This provides an estimation of the security's risk in relation to market risk.
An investor would prefer a positive coskewness because this represents a higher probability of extreme positive returns in the security over market returns.

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