Abstract-- This article investigates linearly combined motion-compensated signals for video compression. In particular, we discuss multiple motion-compensated signals that are jointly estimated for efficient prediction and video coding. First, we extend the wide-sense stationary theory of motion-compensated prediction for the case of jointly estimated prediction signals. Our theory suggests that the gain by multihypothesis motion-compensated prediction is limited and that two jointly estimated hypotheses provide a major portion of this achievable gain. In addition, the analysis reveals a property of the displacement error of jointly estimated hypotheses. Second, we present a complete multihypothesis codec which is based on the ITU-T Recommendation H.263 with multiframe capability. Multiframe motion compensation chooses one prediction signal from a set of reference frames, whereas multihypothesis prediction chooses more than one for the linear combination. With our scheme, the time dela...