Factor Analysis

1)
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity

Approx. Chi-Square
Df

.570
79.783
21

Sig.

.000

Result analysis:
The Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy is 0.570 that indicates factor analysis is appropriate.
The significance value of 0.000 that is less than 0.05 so we can say the factor analysis is significant.
2)
Communalities
Initial

Extraction

VAR00001

1.000

.605

VAR00002

1.000

.273

VAR00003

1.000

.595

VAR00004

1.000

.113

VAR00005

1.000

.624

VAR00006

1.000

.732

VAR00007

1.000

.616

Extraction Method: Principal

Component Analysis.

Result analysis:
The communalities for each variable are unity.

3)
Total Variance Explained
Initial Eigenvalues

Compon
ent

Total

% of Variance

Extraction Sums of Squared Loadings

Cumulative %

Total

% of Variance

Cumulative %

Rotation Sums of Squared Loadings

Total

% of Variance

Cumulative %

2.016

28.797

28.797

2.016

28.797

28.797

1.974

28.207

28.207

1.543

22.045

50.842

1.543

22.045

50.842

1.584

22.635

50.842

.969

13.846

64.688

.906

12.948

77.636

.707

10.101

87.737

.488

6.975

94.712

.370

5.288

100.000

Extraction Method: Principal Component Analysis.

Result Analysis:
There are two factors which has the value of 2.016 and 1.543 which are greater than 1 are extracted.

4)

Result analysis:
The distinct break happens at 3 points.
5)
Component Matrix

Component
1

VAR00001

-.182

.756

VAR00002

.507

.127

VAR00003

.341

-.692

VAR00004

.312

.126

VAR00005

.765

-.198

VAR00006

.562

.645

VAR00007

.781

.076

Extraction Method: Principal

Component Analysis.
a.

2 components extracted.

Result analysis:
Factor 1 has highest coefficient for variables 5 and 7 and somewhat good coefficient for variables 2and 6. thus factor 1 may be labelled as risk
taker.
Factor 2 has highest coefficient for variables 1 and 6 thus factor 2 may be labelled as risk averse.
6)
Reproduced Correlations
VAR00001
Reproduced Correlation

Residual

VAR00001

.605

VAR00002
a

VAR00003

VAR00004

VAR00005

VAR00006

VAR00007

.004

-.585

.038

-.289

.385

-.085

.085

.174

.363

.367

.406

.020

.398

-.254

.214

.214

.257

.253

.302

.582

.488

VAR00002

.004

VAR00003

-.585

.085

VAR00004

.038

.174

.020

VAR00005

-.289

.363

.398

.214

VAR00006

.385

.367

-.254

.257

.302

VAR00007

-.085

.406

.214

.253

.582

.488

-.019

.286

.000

.029

-.151

.060

-.055

-.069

-.062

-.156

-.252

.052

-.174

.041

.046

-.134

-.132

-.106

-.049

-.156

VAR00001

.273

.595

.113

.624

VAR00002

-.019

VAR00003

.286

-.055

VAR00004

.000

-.069

.052

VAR00005

.029

-.062

-.174

-.134

VAR00006

-.151

-.156

.041

-.132

-.049

VAR00007

.060

-.252

.046

-.106

-.156

.732

.616

-.044
-.044

Extraction Method: Principal Component Analysis.

a. Reproduced communalities
b. Residuals are computed between observed and reproduced correlations. There are 14 (66.0%) nonredundant residuals with absolute values
greater than 0.05.

7)

Rotated Component Matrix

Component
1

VAR00001

.050

-.776

VAR00002

.522

.028

VAR00003

.122

.762

VAR00004

.335

-.028

VAR00005

.672

.416

VAR00006

.728

-.450

VAR00007

.769

.159

Extraction Method: Principal

Component Analysis.
Rotation Method: Varimax with Kaiser
Normalization.
a. Rotation converged in 3 iterations.

Result Analysis:
Factor 1 has highest coefficient for variables 6 and 7 thus factor 1 may be labelled as more profit maker investor.
Factor 2 has highest coefficient for variables 3 and 5 thus factor 2 may be labelled as less profit maker investor.