PCA from Factor Analysis

Requirements Clarification & Assessment

To effectively address the question, we need to clarify and assess the following requirements:

1. Understanding of PCA and FA Concepts:

   • Grasp the fundamental principles of Principal Component Analysis (PCA) and Factor Analysis (FA).
   • Identify the primary objectives and applications of each method.

2. Comparison of Methodologies:

   • Distinguish the mathematical and conceptual differences between PCA and FA.
   • Highlight the specific scenarios where each method is applicable.

3. Explanation of Assumptions:

   • Clarify the assumptions underlying both PCA and FA.
   • Discuss the implications of these assumptions on the results and interpretations.

4. Practical Implications and Examples:

   • Provide real-world examples or scenarios where each method is beneficial.
   • Consider the impact of choosing one method over the other in practical applications.

5. Technical and Interpretability Considerations:

   • Assess the technical complexities involved in implementing each method.
   • Discuss the interpretability of results and how they align with business objectives.