Factor Analysis Platform Overview
Factor analysis models a set of observable variables in terms of a smaller number of unobservable factors. These factors account for the correlation or covariance between the observed variables. Once the factors are extracted, you perform factor rotation in order to obtain a meaningful interpretation of the factors.
Consider a situation where you have ten observed variables, X1, X2, …, X10. Suppose that you want to model these ten variables in terms of two latent factors, F1 and F2. For convenience, it is assumed that the factors are uncorrelated and that each has mean zero and variance one. The model that you want to derive is of the form:
It follows that . The portion of the variance of Xi that is attributable ...