Source : Ken French, JQR Capital Why Does Correlation Matter? Two weeks ago we explored the inverse relationship between the size of a company (measured using market capitalization) and their annualized stock performance between the years 1964 and 2022. Last week we expanded our view to look at all seven individual factors with data sourced from the Ken French website. In this post, we will address several important questions. Should we use more than one factor in our stock selection model? Which factors tend to “play nice” without stepping on others toes? Is there a limit to the number of factors we can add to our model? Which Factors Performed Best? The chart displayed above shows the performance of the seven individual factors posted on the Ken French Website. A visual review tells us that two of the seven factors had an inverse relationship with performance (the quintile bars slope downward), two of the factors had mildly upward slope, and three of them had strongly upward slope.