An analysis is presented that examines multihypothesis motion-compensated video coding using a redundant wavelet transform to produce multiple predictions that are diverse in transform phase. In such redundant-wavelet multihypothesis, the corresponding multiple-phase inverse transform implicitly combines the phase-diverse predictions into a single spatial-domain prediction. The performance advantage of this approach is investigated analytically, invoking the fact that the multiplephase inverse involves a projection that significantly reduces the power of the noise not captured by the motion model. The analysis predicts that, under the assumption of a simple translational motion model, redundant-wavelet multihypothesis is capable of up to a 7-dB reduction in prediction-error variance over an equivalent single-phase, single-hypothesis approach. Experimental results support the performance advantage for real motion-compensation residuals.