Business Cycle Risk
Business Cycle Risk exposure reflects a stock’s sensitivity to surprising changes in the growth rate of business activity. Stocks can have a negative exposure to this factor if investors tend to shift their funds toward those stocks when news about the development rate for the economy is not good. Stocks of companies such as retail stores that do well in times of economic development have a higher exposure to Business Cycle Risk than those that are less pretended by the business cycle, such as utilities or government contractors.