# Dictionary:Factor analysis

A method of finding a mathematical relationship among values. Assume that a set of observations can be accounted for by a set of linear relationships involving the factors

where

where is an error term (also called the **specific factor**). Factor analysis (also called **multivariant analysis**) is a method of finding the parameters . Application usually begins with a **learning set**, a data subset used to establish correlations between observations and the factors being determined, and then proceeds to a **predicting set**, where the relations are used for predicting the factors associated with additional observations.