Tag archives: FactorInvesting

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Portfolio Factor Analysis

By analyzing your stock portfolio through the lens of Factor Contributions, you gain a deeper level of insight into where your returns are really coming from and whether or not you should increase exposure to specific Factors. This article explains how you can use Factor Analysis to improve the performance of your own portfolio.

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What is Factor Investing

Factor investing, sometimes referred to as smart beta, involves allocating certain percentages of your portfolio towards defined characteristics that have ideally been shown to produce excess market returns. Additionally, factor analysis can be used to determine if your portfolio has produced any alpha over and above known characteristics which can be attributed to investor skill and not to simple factor exposure.