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A multivariate normal index likelihood is supplied as a full covariance over the observation vector, which cannot be drawn from one year at a time and does not extend past the years it covers, so it is unusable for closed loop as given. This decomposes it into a marginal scale and a single common factor, obs_t = pred_t + d_t (lambda_t u + sqrt(1 - lambda_t^2) e_t), with u shared across years and e_t independent. Both are then drawn per year, and a projection year past the end of the covariance simply reuses the mean loading and scale with the same u.

Usage

cov_to_factor(S)

Arguments

S

Covariance matrix over a fleet's observation vector.

Value

List with d (marginal sd by observation) and lambda (factor loading by observation, in (-1, 1)).