(1) Parts of stock returns not explained by the explanatory variable (the market-index return). They measure the impact of firm-specific events during a particular period. (2) Remainder cash flows generated by pool collateral and those needed to fund bonds supported by the collateral.
RESIDUALS
Meaning of RESIDUALS in English
Campbell R. Harvey. Hypertextual finance English glossary. Английский словарь гипертекстовых финансов. 2012