Definitions
In plain terms
A common implementation gives increasing groups one, unchanged groups one half, and decreasing groups zero.
Technical
The Fintech Builder adaptation must define factor set, signal, group eligibility, overlap, weights, unchanged tolerance, and timestamp.
Scope
It is a constructed diagnostic, not a universally standardized factor-performance index.
Formula
Factor diffusion = 100 * (N_up + 0.5 * N_unchanged) / N_eligibleFDI=100\frac{N_{up}+0.5N_{unchanged}}{N_{eligible}}| Symbol | Meaning | Unit |
|---|---|---|
N_up | eligible factor groups classified as increasing | groups |
N_unchanged | eligible factor groups classified as unchanged | groups |
N_eligible | eligible classified factor groups | groups |
Output unit: percent
Examples
- A Fintech Builder lesson can compute or identify Factor Diffusion Index only after declaring its inputs, timing, and edge-case rules.
Common misconceptions
- It is a constructed diagnostic, not a universally standardized factor-performance index.
Concept relationships
Prerequisites
Where this concept is used
Evidence and governance
- Business Cycle Indicators: Diffusion Indexes The Conference Board · first party methodology
Supports: preferred label, short definition, technical definition, formula
Limits: Applying the general diffusion construction to sectors or factor groups is a declared Fintech Builder adaptation.
- Reviewed by
- fintech-builder-batch-005
- Last reviewed
- 2026-07-27
- Next review
- 2027-07-27
- Record status
- evidence reviewed
This record is evidence-reviewed and readable, but not yet promoted to published — it is served noindex,follow and excluded from the sitemap.