Regression Analysis By Example «360p»

Regression isn't just about the past; it’s about the . With a solid model, you can check tomorrow's weather forecast and know exactly how much milk to order.

Once you run the numbers, you don't just take the result at face value. You check: R-Squared ( R2cap R squared Regression Analysis by Example

): Daily high temperature (the factor you think causes the change). 1. The Simple Linear Model The goal is to find the equation for a straight line: Regression isn't just about the past; it’s about the

): This tells you what percentage of the "story" is explained by temperature. If , then 85% of your sales fluctuations are due to heat. You check: R-Squared ( R2cap R squared ):

The relationship actually looks like a line, not a curve.

For a regression to be reliable, your data must pass the "sniff test":