Factor Overview

Factor Overview

A factor is a measurable attribute of a security that helps explain its returns relative to the broader market. Classic examples include value (cheap stocks tend to outperform expensive ones over long horizons), momentum (recent winners tend to keep winning over the next few months), quality (profitable, low-leverage firms earn a premium), and size (smaller firms have historically outperformed larger ones, with caveats).

Factor research is mostly the work of turning those informal stories into something testable: a signal definition, a universe, a rebalancing rule, and a way to measure risk-adjusted return. Each topic page in this section drills into one of those pieces, with small reproducible examples where they help.

Use the sidebar to jump into a specific factor or methodology page.