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Factor Investing Strategy — Build your own on AWS with IEX cloud
Build a systematic factor investing strategy with AWS Lambda, IEX Cloud API and only 10$. In this article I present a fully working factor investing strategy from theory, data collection and deployment in the cloud.
Factor investing is way to categorize stock that differs from traditional sector or country. Instead of these classic classifications, we use factors or styles. One of the benefits of factor investing is that it can help investors to focus on what’s important. By identifying the factors that are associated with high returns, investors can focus their attention on those areas in the market where they are most likely to achieve the best long-term results. Factor investing is also designed to lower risk by diversifying into stocks that exhibit different characteristics.
Popular Factors among Quant and Portfolio Managers
There is an unlimited number of factors possible but among finance professionals five are the most popular. They each capture a certain stock behavior:
Value
Value investing focuses on buying stocks that are priced below intrinsic value or below their peers. This involves analyzing stocks to determine how much they’re worth and only buying them when they’re selling at a…
