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R squared in excel trendline3/21/2024 ![]() ![]() This post goes over R 2, and by the end you will understand what it is and how to calculate it, but unfortunately you won’t have a good rule of thumb for what R 2 value is good enough for your analysis, because it is entirely problem dependent. You need to know, is your model a good fit? A bad fit? Mediocre? One commonly used metric for determining goodness of fit is R squared, or more formally, the coefficient of determination. But after you generated the car to profit relationship function how can you tell if it is a good quality? After all, if you are using it to try to predict the stock market, you will be betting real money on it. In order to generate that function you would use regression analysis. (In order to get an advantage in the stock market) You want to find a function that relates the two, so that you can use your satellites to count the number of cars and predict Walmart’s quarterly earnings. You also know the quarterly sales that Walmart had during that time frame from their earnings report. ![]() For instance, maybe you have been using satellites to count the number of cars in the parking lot of a bunch of Walmart stores for the past couple of years. Regression is a way of fitting a function to a set of data. R Squared – A Way Of Evaluating Regression ![]()
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