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Investing Glossary:
Regression
Copyright 2010,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
- R -
| Term: |
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| Definition: |
| A mathematical technique used to explain and/or predict. The general form is Y = a + bX + u, where Y is the Variable that we are trying to predict; X is the variable that we are using to predict Y, a is the intercept; b is the slope, and u is the Regression residual. The a and b are chosen in a way to minimize the squared sum of the residuals. The ability to Fit or explain is measured by the R-square.
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