Level 1 or 2 question. I was reading the return distribution. Is positively skewed distribution with long left tail or right tail? Thanks for the answer!
Right is right.
Positive skewed = right tail longer Negativel skewed = left tail longer
I tend to think of it as Positive skew : Positive side THICKER Negative skew: Negative side THICKER The tails theoretically both go off to infinity, so remembering which one is thicker helps.
that remind me of investment return distribution in emerging market tends to have fat tails that are negatively skewed…anyone to confirm…how about investment in real estate…something having fat tails also but not sure positive or negative
Managed Futures has positive skewness, because of momentum strategies they follow. Hedged funds in general negatively skewed and have fat tails. Different strategies might lead to different return distribution caharacteristics, however. Adding managed futures to a hedge fund portfolio is recommended because of its effects imparting positive skewness and balancing undesirable return distribution caharactaristics of hedge funds.
