Factor analysis

Factor analysis is a statistical method used to identify underlying factors that explain the pattern of correlations within a set of observed variables. It is used to reduce a large number of variables into a smaller number of factors, which can then be used to explain the relationships between the variables.

To conduct a factor analysis, the following steps are taken:

1. Collect data on a set of variables.
2. Scale and center the data so that the mean of each variable is 0 and the standard deviation is 1, making all features comparable.
3. Calculate the correlation matrix of the variables.
4. Use singular value decomposition (SVD) to decompose the correlation matrix into its constituent parts.
5. Interpret the factors.
6. Calculate the factor scores.

If you are familiar with principal component analysis (PCA), you might be wondering what the difference between PCA and factor analysis is. The main difference is that PCA is primarily used to identify...