Combining Factors
With this combination, we combined the 20% of companies with the highest ERP5-rank with all the second factors we tested.
Your average return of combining the ERP5 score with all the second factors would have been 458.5% (median was 479.9%) over 12 years. The average, this was the fourth best two-factor strategy we tested.
Similar to what we found with the MF-rank, the best-performing strategy was combining the ERP5 score with companies that had the highest 6-month price index. If you did this, your returns would have been 732.1%.
The worst return was generated by combining the ERP5 score with companies with the highest return on investment capital on average over the past five years. This would have only given you a return of 114.4%.