Descriptive statistics

What are Descriptive statistics

Mathematical quantities (such as mean, median, standard deviation) that summarize and interpret some of the properties of a set of data (sample) but do not infer the properties of the population from which the sample was drawn.

A set of brief descriptive coefficients that summarizes a given data set, which can either be a representation of the entire population or a sample. The measures used to describe the data set are measures of central tendency and measures of variability or dispersion.

BREAKING DOWN: 

1-Measures of central tendency include the mean, median and mode, while measures of variability include the standard deviation (or variance), the minimum and maximum variables, kurtosis(*) and skewness.

 2-Descriptive statistics provide a useful summary of security returns when performing empirical and analytical analysis, as they provide a historical account of return behavior. Although past information is useful in any analysis, one should always consider the expectations of future events.

(*) Kurtosis: A statistical measure used to describe the distribution of observed data around the mean.

BREAKING DOWN

'Kurtosis': Used generally in the statistical field, kurtosis describes trends in charts. A high kurtosis portrays a chart with fat tails and a low, even distribution, whereas a low kurtosis portrays a chart with skinny tails and a distribution concentrated toward the mean.