If we use the regression line to make predictions and want to know about the average error in our prediction, we would look at the

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11-08-2022
Mathematics

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If we use the regression line to make predictions and want to know about the average error in our prediction, we would look at the

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tutorconsortium203 tutorconsortium203 · Answer 1 · 2022-08-19T01:01:56+02:00

If we use the regression line to make predictions and want to know about the average error in our prediction, we would look at the "R-squared value".

What is R-squared value?

R-squared (R²) is a measurable statistic that quantifies the percentage of the variation explained through an independent variable as well as a regression model's variables for a dependent variable.

Some key features regarding the R-squared value are-

Whereas correlation describes the degree to which the relationship among an independent and a dependent variable, R-squared indicates how well one variable's variation explains the variance of the other.
So, if a model's R² is 0.50, the model's inputs can explain roughly half of a observed variation.
An R-squared of 100% indicates that movements with in index (and the independent variable(s) of interest) perfectly explain all movements in the security (or even other dependent variables).

To know more about the R-squared value, here

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