The Other Magnificent Seven

In a risk model, some factors are primarily useful for explaining the cross-sections of returns.

Other factors may also have persistent alpha associated with them due to structural or behavioral biases. These factors may be of particular interest to portfolio managers, as they can be expressed through self-funding market-neutral portfolios.  

Which factors have suggested alpha potential over the last ten years? We have identified seven factors that we think are of particular relevance to hedge funds.