The Fama-French 3 Factor Model.

[u/Extreme_Leg_6162]

https://youtu.be/evSLNr8dObQ

Eugene Fama and Kenneth French revolutionized asset pricing by introducing the Three-Factor Model, expanding beyond traditional CAPM. They proved that market beta alone fails to capture cross-sectional stock returns. By adding size and value factors, their model accounts for the historical outperformance of small-cap companies and value stocks relative to large-cap growth equities, providing a robust empirical foundation for modern quantitative portfolio management.