how are multiple regression models used in finance 
any econometric model that looks at more than one variable may be a multiple factor models compare two or more factors to analyze relationships between variables and the resulting performance the fama and french three factor mod is such a model that expands on the capital asset pricing model capm by adding size risk and value risk factors to the market risk factor in capm which is itself a regression model by including these two additional factors the model adjusts for this outperforming tendency which is thought to make it a better tool for evaluating manager performance the bottom linemlr is a statistical tool used to predict the outcome of a variable based on two or more explanatory variables if just one variable affects the dependent variable a simple linear regression model is sufficient if on the other hand more than one thing affects that variable mlr is needed a classic example would be the drivers of a company s valuation on the stock market usually a company s share price is influenced by a variety of factors in this case the dependent variable would be the share price which is the thing we are trying to predict while the independent explanatory variables would be the factors that affect it 