cluster analysis

cluster analysis definition - finance
A statistical technique that identifies clusters of stocks whose returns are highly correlated within the cluster. However, the returns are relatively uncorrelated between clusters. Cluster analysis has the ability to identify groups such as growth, cyclical, and stable stocks.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.