The probability density function (PDF) is a statistical expression that defines the probability that some outcome will occur. In this function, the probability is the percentage of a dataset's distribution that falls between two criteria.

PDF is used by financial analysts to understand how returns are distributed in order to evaluate the risk and expectations of investment prices and returns.

PDFs are usually plotted on a graph that typically resembles a bell curve, with the data lying below the curve.

A skewed curve at either end indicates greater or lesser risk/reward.