Sentences with phrase «diversifying using factor»

Finally, investors should consider diversifying using factor strategies, which historically have had relatively low correlations with each other, and lower than sectors and single stocks have with each other.

Not exact matches

The Fama - French three factor model, using the SMB and HML factors, explains over 90 % of returns of diversified portfolios, instead of the average 70 % explained by the CAPM.

Further, Larry Swedroe points out that for the past 20 years, models using just four factors explain about 95 % of the differences in returns between diversified portfolios.

Fama - French conducted studies to test their model, using thousands of random stock portfolios, and found that when size and value factors are combined with the beta factor, they could then explain as much as 95 % of the return in a diversified stock portfolio.

First, it eliminates the need to time factors, it may lower transaction costs and because it's diversified across factors, it may be used as a core holding.

In a portfolio tilted toward high - growth stocks with less stable balance sheets, a quality factor ETF can be used to seek achieve diversified exposure to financially healthy stocks.

The Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free ETF (CHGX) uses diversified impact screens to invest in companies that engage in favorable business practices and socially responsible investing driven by environmental, social and governance (ESG) factors.

Another way to improve your credit history is to diversify your credit since that is another factor that is used to calculate your credit score.