Hey guys, a question on style bias/style fit please:
In “Socially Responsible Investing” section, it says ” Return-based style analysis can detect the presence of syle bias and monitor the success of its remedy.”
My question is:
Is ths “style bias” here same as the “style fit” mentioned in sector “return-based style analysis”?
Quoted as below style fit from earlier section “return-based style analysis”:
“From the regression, we are also provided with the coefficient of determination (R^2). This provides the amount of the investor’s return explained by the regressions style indices. It measures the style fit. One minus this amount indicates the amount unexplained by style and due to the manager’s security selection.
In “Socially Responsible Investing” section, it says ” Return-based style analysis can detect the presence of syle bias and monitor the success of its remedy.”
My question is:
Is ths “style bias” here same as the “style fit” mentioned in sector “return-based style analysis”?
Quoted as below style fit from earlier section “return-based style analysis”:
“From the regression, we are also provided with the coefficient of determination (R^2). This provides the amount of the investor’s return explained by the regressions style indices. It measures the style fit. One minus this amount indicates the amount unexplained by style and due to the manager’s security selection.