The Carhart Model is a financial model used to explain stock returns by incorporating factors beyond the traditional Capital Asset Pricing Model (CAPM). It includes four key factors: market risk, size, value, and momentum. The model helps investors understand how these factors influence the performance of stocks over time. Developed by Mark Carhart in 1997, the model builds on the Fama-French three-factor model by adding a momentum factor. This momentum factor suggests that stocks that have performed well in the past are likely to continue performing well in the future, providing a more comprehensive view of stock price movements.