Coefficient of Determination
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Definition of 'Coefficient of Determination'
A measure used in statistical model analysis to assess how well a model explains and predicts future outcomes. It is indicative of the level of explained variablity in the model. The coefficient, also commonly known as R-square, is used as a guideline to measure the accuracy of the model.
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Investopedia explains 'Coefficient of Determination'
One use of the coefficient of determination is to test the goodness of fit of the model. It is expressed as a value between zero and one. A value of one indicates a perfect fit, and therefore, a very reliable model for future forecasts. A value of zero, on the other hand, would indicate that the model fails to accurately model the dataset.
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Search results for 'Coefficient of Determination'
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http://www.investopedia.com/professionals/questionoftheweek/cfa/190705.asp
... Exam Prep Quizzer; FAQs; Calculators; Question of the Week. Which of the following
statements is (are) true with respect to the coefficient of determination? ...
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http://www.investopedia.com/exam-guide/cfa-level-1/quantitative-methods/regression-analysis.asp
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http://www.investopedia.com/articles/financial-theory/09/calculating-beta.asp
... One distinct advantage of calculating the beta yourself is that you can gauge its
reliability by calculating the coefficient of determination, or as it is ...
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http://www.investopedia.com/exam-guide/cfa-level-1/financial-ratios/business-risk-ratios.asp
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