Multi Factor Analysis
By:
Edward Veterans
On
09/11/2025Reading time:
0 min
Summary:
Today we explore one of the most powerful frameworks in modern investing — "the multi-factor analysis.”
“What are the quantitative factors that truly drive performance?
Many investors call themselves stock-pickers or allocators, but what really matters…
iis identifying the factors behind returns.
“The six key factors are: Momentum, Value, Quality, High Dividend, Low Volatility, and Size.
“So how can you use this in your own analysis?
Apply these factors to real data, not opinions.”
“And here’s the fun part — we’ll decide together.
In the comments below, tell us which stock, sector, or ETF you’d like us to analyze in a future episode.
We’ll pick one suggestion and walk through a complete factor breakdown.
“That’s how professionals think — with data, collaboration, and transparency.
🔹 First factor is …Momentum
Momentum means "Assets that have outperformed recently tend to keep outperforming in the short-to-medium term ».
It’s driven by behavioral biases — underreaction to news, herding.
But momentum can reverse sharply during turning points.
🔹 Second factor is …Value
IIt means: Cheap assets — low P/E (price earning ratio) , low P/B (price to book) — historically outperform expensive ones.
Value rewards patience, but it can underperform for long cycles, like during the 2010s tech boom.
🔹 Third factor is….Quality
It means Companies with strong profitability, low leverage, and stable earnings show resilience — yet when everyone wants quality, valuations can stretch.
🔹 Fourth factor is ….High Dividend
It is a factor linked to high dividend companies. A high yield for a stock can be attractive — but not always safe.
Focus on sustainability of dividends, not yield traps.
⸻
🔹 5) Low Volatility
Lower-volatility portfolios often deliver better risk-adjusted returns — the famous ‘low-vol anomaly..
The trade-off is sector concentration, typically in utilities and staples.
🔹 6) Size
Smaller companies outperform over time due to growth potential — though with more volatility and liquidity risk.