Republic of the Philippines

University of Northeastern Philippines

Iriga City

SCHOOL OF GRADUATE STUDIES AND RESEARCH

Subject : ED-203 INFERENTIAL STATISTICS

Name:. IMELDA P. MIRABEL
Course : MASTER IN ARTS – MAJOR IN ENGLISH
Semester : SECOND SEM. 2020-2021
Professor : MARIA P. DELA VEGA Ph.D.
Topic : SKEWNESS

SKEWNESS
It describes the degree of departures of the distribution of the
data from symmetry. Skewness essentially measures the relative size of
the two tails. If the curve is shifted to the left or to the right, it
is said to be skewed.
Normal Curve is a symmetrical bell-shaped curve, whose end tails
are continuous and asymptotic. The mean, median and mode are equal.
The scores are normally distributed if the computed value of SK = 0.
Normal Distribution is used as reference for determining the
skewness of a distribution. The ideal normal distribution is the
probability distribution with almost no skewness. It is nearly
perfectly symmetrical. Due to this, the value of skewness for a normal
distribution is zero.

In a normal distribution and perfectly symmetrical bell curve,

the mean, median and mode are always the same value.

Two Types of Skewness:

1. Positive Skewness
2. Negative Skewness
 Positive Skewness – Positively skewed when the curve is skewed
to the right, it has a long tail extending off to the right but a
short tail to the left.

When the computed value of SK is positive most of the scores of

students are very low, showing they performed poor in the said
examination.

Negative Skewness – Negatively skewed when a distribution is

skewed to the left. It has a long tail extending to the left but a
short tail to the right.
 When the computed value of SK is negative, most of the students
got a very high score, showing that they performed very well in the
said examination.

What is the use of skewness?

Skewness indicates the direction and relative magnitude of a

distribution's deviation from the normal distribution. Skewness is a
descriptive statistic that can be used in conjunction with the
histogram and the normal quantile plot to characterize the data or
distribution. 

Conclusion
Skewness exists in most financial markets and is an important
measure of risk. It is still unclear why skewness exists though
several compelling arguments have been made; including, good/bad news
asymmetry, price discovery, prospect theory and uncertainty of
information. Negative skew had been shown to receive higher expected
returns. It is generally believed that investors have a preference for
positive skew, though evidence supporting a partiality for negative
skew also exists.

THANK YOU!