DEFINITION of 'Least Squares'
A statistical method used to determine a line of best fit by minimizing the sum of squares created by a mathematical function. A "square" is determined by squaring the distance between a data point and the regression line. The least squares approach limits the distance between a function and the data points that a function is trying to explain. It is used in regression analysis, often in nonlinear regression modeling in which a curve is fit into a set of data.
INVESTOPEDIA EXPLAINS 'Least Squares'
The least squares approach is a popular method for determining regression equations. Instead of trying to solve an equation exactly, mathematicians use the least squares to make a close approximation (referred to as a maximumlikelihood estimate). Modeling methods that are often used when fitting a function to a curve include the straight line method, polynomial method, logarithmic method and Gaussian method.

Sum Of Squares
A statistical technique used in regression analysis. The sum ... 
Residual Sum Of Squares  RSS
A statistical technique used to measure the amount of variance ... 
Stepwise Regression
The stepbystep iterative construction of a regression model ... 
Autoregressive
A stochastic process used in statistical calculations in which ... 
Regression
A statistical measure that attempts to determine the strength ... 
Statistics
A type of mathematical analysis involving the use of quantified ...

Investing Basics
Calculating Beta: Portfolio Math For The Average Investor
Beta is a useful tool for calculating risk, but the formulas provided online aren't specific to you. Learn how to make your own. 
Investing Basics
Regression Basics For Business Analysis
This tool is easy to use and can provide valuable information on financial analysis and forecasting. Find out how. 
Options & Futures
Bettering Your Portfolio With Alpha And Beta
Increase your returns by creating the right balance of both these risk measures. 
Mutual Funds & ETFs
Analyzing Mutual Funds For Maximum Return
Using a few simple metrics will help you pick the right fund for your portfolio. 
Active Trading
The Linear Regression Of Time and Price
This investment strategy can help investors be successful by identifying price trends while eliminating human bias. 
Personal Finance
What is the average salary for an accountant?
Learn about the average salaries of various accounting positions, and see the difference that an accounting degree makes in attaining higher wages. 
Fundamental Analysis
Lognormal and Normal Distribution
When and why do you use lognormal distribution or normal distribution for analyzing securities? Lognormal for stocks, normal for portfolio returns. 
Economics
Where is cost of living lowest in the world?
Learn how the cost of living is the lowest in India based on numbers derived from the CPI and organizations like Expatistan and Numbeo. 
Economics
Is the Bureau of Labor Statistics accurate?
Read this brief analysis of the accuracy of Bureau of Labor Statistics, including a summary of the types of reports issued and how they are compiled. 
Investing Basics
Using Normal Distribution Formula To Optimize Your Portfolio
Normal or bell curve distribution can be used in portfolio theory to help portfolio managers maximize return and minimize risk.