Platykurtic
Candlefocus EditorPlatykurtic distributions can be useful for investors looking to manage risk and maximize returns. By investing in assets whose returns follow a platykurtic distribution, the investor can reduce the possibility of large losses. Instead of negatively-skewed returns of a normal distribution, the flat curve of a platykurtic distribution indicates possible positive payoffs across a wider range of outcomes.
In addition to minimizing the potential losses associated with extreme events, the less dramatic peaks and valleys of returns associated with a platykurtic distribution also means that investors may enjoy a more consistent return with less volatility. Because there is a slower rate of return than in a normal distribution, investors may benefit from steady profits without being exposed to the large losses that can occur in a normal distribution.
In conclusion, platykurtic distributions can be seen as a more conservative approach to investing, as the lack of extreme events means the investor reduces the risk of large losses. Despite the reduced returns in comparison to a normal distribution, a platykurtic distribution provides more steady payoffs and profits, making it an attractive option for risk-averse investors.