About Us » What Makes Eta® Analysis Unique?

What Makes Eta® Analysis Unique?

The Short Answer: To our knowledge, EconomicInvestor is the only provider to offer a standardized, statistically sound, scientifically tested method for measuring the economy's influence on investment prices.

The Long Answer:

Everyone knows that investment prices fluctuate — sometimes a lot, sometimes a little. But what causes these fluctuations? There are two major factors — the economy is one, the other is internal company or industry details.

Most financial research concentrates on just the second of these (the individual company or industry details) and ignores the economy's influence. But statistical studies show that the first factor — current economic information — usually explains over 80% of a stock's price! That's why, as an investor, you want to know how the economy influences your investments.

Before now, the best standard research methods could typically only explain between 5% and 15% of what an investment would do and why. But that was before Eta Analysis.

EconomicInvestor's patented Eta Analysis tools let you evaluate the economy's effect on thousands of individual investments. You can use these tools to identify how specific components of the economy impact the price of a stock, fund, index, or an entire portfolio. You can use our Climate Ratings to evaluate the current economic climate for particular investments.

The EconomicInvestor stock analysis model can generally explain at least 80% of an asset's price, making it far more accurate than other models — even those used by investment professionals.

Eta Analysis provides better results than traditional methods of analysis because it shows how The Economy Matters on a stock-by-stock, portfolio-by-portfolio basis.

Stock Price graphic: 80% Economy and 20% Company Specific


For some examples of how Eta Analysis compares to other methods of analysis, see Demonstrations.

For a technical explanation of how Eta Analysis works, see "Eta Analysis: Behind the Scenes."


Many financial advising firms claim to understand how the economy will affect your portfolio. What makes us different?

As previously mentioned, EconomicInvestor is the only product we know of that has standardized, statistically sound, scientifically tested methodology for measuring the economy's influence on investment prices. The tools on EconomicInvestor.com have been developed, tested, and patented by experts in the fields of finance, economics, and statistics. Now we are offering our powerful new tools to you.


Why are no other companies providing investors with tools comparable to ours?

They can't. We have the patents.

But why wasn't this done long ago? People 50 years ago did understand that the economy affected stock prices. But researchers at the time didn't have the computing power to process massive amounts of economic information, so they weren't able to use such data in their models.

To get around these technological obstacles, the researchers made a few key assumptions about the economy. This greatly simplified their equations, but reduced the quality of their results. These simplifying assumptions still form the foundation of most investment analysis today! In fact, these assumptions remain unquestioned and even "off limits" as questions by many financial advisers and finance schools today.

Outdated assumptions weren't good enough for the founders of EconomicInvestor. Statisticians and economists at the Center for Computationally Advanced Statistical Techniques (c4cast.com), equipped with the latest technology, have gone on where their predecessors had to turn back. After processing massive amounts of data, we have developed a model that shows how the economy relates to your investments on many levels. EconomicInvestor can offer you a "Better Window on the Future" right now. 


See for yourself:

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