Scheefheid (Skewness)

Comparison between mean, median, and mode provides information on how data is distributed.

In this example graph, the left side of the graph is the mirror image of the right side. It is called the symmetrical or normal distribution of the data.

In such normally distributed graph, the mean, median, and mode values lie in the same position indicated by the dotted line.

Suppose the left and right side of the graph is not the same; it results in the skewness in the distribution. Here, the mean, median, and mode are not the same and reflect the different values in the data set.

Skewness indicates the presence of outliers. For instance, in this case, the outliers are present on the right side of the graph.

Skewness is often used to make investment decisions. The skewness in the returns of an investment model indicates whether the investment will give frequent smaller gains and few huge losses; or frequent losses and a few large wins.