>Factor Analysis: India Valuation Dispersion indicator (EDELWEISS)

In last couple of months the market valuations dispersion is hovering below +1.5 SD levels.
As expected the market has consolidated in a broad range. The dispersion indication still
points towards further consolidation in near term.

Valuation dispersion calculation methodology: PE & PB factors across the universe ( BSE-200 stocks) are ranked individually. The difference between the top & bottom deciles medians provides the factor dispersion for each factor. Then a composite valuation dispersion based on an equal weighted average PE & PB dispersion is derived. Valuation dispersions are expressed in z-scores terms (i.e. no. of standard deviation away from the 1 year rolling mean).

To read the full report: FACTOR ANALYSIS