
doi: 10.2139/ssrn.988300
The purpose of factor analysis is to select from a large number of random variables, a reduced number of factors which provide the possibility to more exactly and more complexly establish the interdependences. The principal component analysis is based on a rigorous mathematical instrument, which does not take into consideration any of the arbitrary elements or subjective decisions. The principal component analysis has to determine the eigen dominant valuation - method known under the name of "Hotelling's deflator method", where to find out the eigen values means to determine the joint factors.
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