Can anyone help me to explain these two terms In brief? I am confused with this.
Thanks in advance!
Can anyone help me to explain these two terms In brief? I am confused with this.
Thanks in advance!
you have a portfolio that contains stocks from 2 industries retail and infrastructure
you change the proportion of of retail:infrastructure away from the benchmark portfolio you got active factor risk
Now each industry had stocks from 3 different industries
you kept the factor exposure same and changed the proportion of stocks within each industry you got active specific risk