Attribute Bias


Attribute Bias
The tendency of stocks selected by a quantitative technique or model to have similar fundamental characteristics, such as high yields and low earnings valuations. Most investing models that provide investment choices as an output will have to establish parameters that, by definition, will exclude certain stocks and offer ones with similar traits in return.

An investing or research technique that produces choices with attribute bias is not necessarily a bad thing; the biggest danger is that the stocks may correlate closely in their returns, eliminating some of the value of a diversified portfolio. One thing in particular to watch out for is investing in several companies operating in the same industry, as industry peers will often have similar fundamental values.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Attribute bias — The tendency of stocks preferred by the dividend discount model to share certain equity attributes such as low price earnings ratios, high dividend yield, high book value ratio or membership in a particular industry sector. The New York Times… …   Financial and business terms

  • attribute bias — The tendency of stocks preferred by the dividend discount model to share certain equity attributes such as low price earnings ratios, high dividend yield, high book value ratio, or membership in a particular industry sector. Bloomberg Financial… …   Financial and business terms

  • Self-serving bias — A self serving bias occurs when people attribute their successes to internal or personal factors but attribute their failures to situational factors beyond their control. The self serving bias can be seen in the common human tendency to take… …   Wikipedia

  • Actor-observer bias — In psychology, people are known to display an actor observer bias, when actors tend to attribute their own behavior to their circumstances (i.e., situation causes), but tend to attribute the behaviors of those we observe to their dispositions… …   Wikipedia

  • Choice-supportive bias — In cognitive science, choice supportive bias is the tendency to retroactively ascribe positive attributes to an option one has selected. It is a cognitive bias. What is remembered about a decision can be as important as the decision itself,… …   Wikipedia

  • Media bias — Part of a series on Censorship By media …   Wikipedia

  • Cognitive bias — For an article about the conceptual problems of the mind see Cognitive closure (philosophy). Psychology …   Wikipedia

  • Egocentric bias — occurs when people claim more responsibility for themselves for the results of a joint action than an outside observer would.Besides simply claiming credit for positive outcomes, which might simply be self serving bias, people exhibiting… …   Wikipedia

  • News bias — is generally defined as slanting a news story so to favor a side which has an interest in a conflict.Accuracy in Media says: *Bias is defined in one study as a perceived attribute of a news source whereby the individual news source, or the group… …   Wikipedia

  • Sample Selection Bias — A type of bias caused by choosing non random data for statistical analysis. The bias exists due to a flaw in the sample selection process, where a subset of the data is systematically excluded due to a particular attribute. The exclusion of the… …   Investment dictionary


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.