Equity Risk Factors
Stocks have exposure to different return and risk factors. The most significant of these factors include:
Market: the overall equity market
Size: market capitalization
Book: book value
Profit: operating profitability
Invest: degree of investment
The returns and risk of these factors varies through time and provide an opportunity for an investor to tailor their portfolio exposure to the factor where the expected reward is most promising. Importantly, it permits the investor to assess both the reward and risk concurrently so that the trade-offs are well understood.
Artful Questions. Scientific Answers.
Equity Risk Factor Dashboard