Microeconomic factors are factors measured by characteristics of the companies themselves, like price-to-earnings (P/E) ratios or growth rates. Macroeconomic factors are economic influences on security returns. A company’s position in the business cycle is dependent on the cycle itself, and cannot be accurately measured by looking at a company’s fundamentals. Payout ratios and management tenure are pieces of company-specific data suitable for use in a microeconomic factor model. |
