fat-tailed distribution
[/fæt-teɪld dɪˈstrɪbjuːʃən/]
nounpl: fat-tailed distributions
distribuição de cauda pesada
1. A probability distribution with tails that are thicker or heavier than those of a normal distribution, meaning extreme values occur more frequently than predicted by a normal distribution
The fat-tailed distribution better explains financial market crashes, where extreme events are more common than a normal distribution would suggest.
A distribuição de cauda pesada explica melhor os crashes do mercado financeiro, onde eventos extremos são mais comuns do que uma distribuição normal sugeriria.
2. In statistics and risk management, a distribution that exhibits leptokurtosis (high kurtosis), indicating a greater probability of extreme or outlier events
Risk managers prefer fat-tailed distribution models when assessing portfolio risk because they account for black swan events.
Gerentes de risco preferem modelos de distribuição de cauda pesada ao avaliar risco de portfólio porque eles levam em conta eventos cisne negro.
This term is primarily used in technical and academic contexts, particularly in finance, statistics, and risk management. It gained prominence after the 2008 financial crisis when financial professionals recognized that traditional normal distribution models failed to predict extreme market movements. In Brazil, this concept is increasingly important in Banco Central risk frameworks and institutional investment analysis. The term reflects the growing international understanding that real-world financial data does not follow a simple bell curve.
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