what does skewness tell investors 
investors note skewness when judging a return distribution because it like kurtosis considers the extremes of the data set rather than focusing solely on the average short and medium term investors look at extremes because they are less likely to hold a position long enough to be confident that the average will work out investors commonly use standard deviation to predict future returns but the standard deviation assumes a normal distribution as few return distributions appear normal skewness is a better measure to base performance predictions skewness risk is the increased risk of turning up a data point of high skewness in a skewed distribution many financial models that attempt to predict the future performance of an asset assume a normal distribution if the data are skewed this model will always underestimate skewness risk in its predictions the more skewed the data the less accurate this financial model will be image by julie bang investopedia 2020