The Fama French 3-factor model

The Fama-French model famously adds two additional factors to the CAPM model to describe asset returns:

$$ R_{P} = RF + \beta_{M}(R_{M}-RF)+b_{SMB} \cdot SMB + b_{HML} \cdot HML + \alpha $$

SMB: The small minus big factor
\(b_{SMB}\): Exposure to the SMB factor
HML: The high minus low factor
\(b_{HML}\): Exposure to the HML factor
\(\alpha \): Performance which is unexplained by any other factors
\(\beta_{M}\): Beta to the broad market portfolio B

The FamaFrenchData DataFrame is available in your workspace and contains the HML and SMB factors as columns for this exercise.

Define a regression model that explains Portfolio_Excess as a function of Market_Excess, SMB, and HML.
Extract the adjusted r-squared value from FamaFrench_fit.