Hi Statman, Thanks for the link. It was an interesting read but I couldn't find an answer to my question. I thought I'd draw a 2 factor CCD to explain. As you can see, any pair of columns are orthogonal to each other (dot product is zero, i always thought that was the criterion for orthogonality but maybe it's not - see below). The only exception is that for the A^2 and B^2 columns the dot product can never be zero and so I'm interpreting this (probably incorrectly) that those factors are not orthogonal. However, if I plot A^2 and B^2 as a pair of points, they all sit at the 4 corners of a square and if you try to fit a trend line you get an R value of zero. Maybe I've answered my question - Is it the case that it's the R=0 which means A^2 and B^2 are orthogonal to each other and so their betas can be independently estimated. So a non zero dot product of two column vectors doesn't mean non-orthogonality