Statistical technique that can uncover relationship patterns underlying hundreds of interacting phenomenon such as changes in interest rates, inflation, and/or oil prices. Used in fields as diverse as horse racing and financial markets, factor analysis is used to analyze large numbers of dependent variables to detect certain aspects of the independent variables (called factors) affecting those dependent variables - without directly analyzing the independent variables. It enables an analyst to reduce the number of elements to be studied and to observe how they are interlinked. Factor analysis techniques are used in constructing factor models.
Related information about factor analysis:
- Factor analysis - Wikipedia, the free encyclopedia
Factor analysis is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved ...
- Factor Analysis - Psychology - Cornell University
Introduction to factor analysis, with worked examples.
- Understanding Factor Analysis - University of Hawaii
Online textbook providing overview of factor analysis, by political scientist RJ Rummel.
- Annotated SPSS Output: Factor Analysis
Factor analysis is a method of data reduction. It does this by seeking underlying unobservable (latent) variables that are reflected in the observed variables ...
- Exploratory Factor Analysis: A book manuscript by Ledyard
Exploratory Factor Analysis. A book manuscript by Ledyard ...
- Introduction to Factor Analysis
This work is licensed under a Creative Commons Attribution-NonCommercial- ShareAlike License. Your use of this material constitutes acceptance of that ...
- Principal Components and Factor Analysis - StatSoft
Chapter from StatSoft's Electronic Statistics Textbook.
- Getting Started in Factor Analysis - Data and Statistical Services
Factor analysis is used mostly for data reduction purposes: – To get a small set of variables (preferably uncorrelated) from a large set of variables (most of which ...