Multi-Factor Model

Multi-Factor Model

Multi-factor models in finance are widely-used quantitative models that use a variety of factors (variables) to create desired outputs, such as the expected return on individual securities, sets of securities or portfolios. Asset managers and investment advisors use multi-factor models to align portfolio construction with desired investment outcomes, monitor portfolio performance, optimise arbitrage opportunities, or to manage and tailor risk exposures.

logo-animationlogo-animationlogo-animation

Related terms