Nonlinear Regression

AAA

DEFINITION of 'Nonlinear Regression'

A form of regression analysis in which data is fit to a model expressed as a mathematical function. Simple linear regression relates two variables (X and Y) with a straight line (y = mx + b), while nonlinear regression must generate a line (typically a curve) as if every value of Y was a random variable. The goal of the model is to make the sum of the squares as small as possible. Nonlinear regression uses logarithmic functions, trigonometric functions and exponential functions, among other fitting methods.

INVESTOPEDIA EXPLAINS 'Nonlinear Regression'

Nonlinear regression modeling is similar to linear regression modeling in that both seek to graphically track a particular response from a set of variables. Nonlinear models are more complicated than linear models to develop because the function is created through a series of approximations (iterations) that may stem from trial-and-error. Mathematicians use several established methods, such as the Gauss-Newton method and the Levenberg-Marquardt method.

RELATED TERMS
  1. Nonlinearity

    A relationship which cannot be explained as a linear combination ...
  2. Sum Of Squares

    A statistical technique used in regression analysis. The sum ...
  3. Residual Sum Of Squares - RSS

    A statistical technique used to measure the amount of variance ...
  4. Stepwise Regression

    The step-by-step iterative construction of a regression model ...
  5. Regression

    A statistical measure that attempts to determine the strength ...
  6. Statistics

    A type of mathematical analysis involving the use of quantified ...
Related Articles
  1. To measure the risk of a particular equity, many investors turn to beta.
    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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.
  9. Economics

    How does the Bureau of Labor Statistics define contingent workers?

    Discover how contingent workers are a significant part of the labor force and are defined as persons who do not expect their jobs to last.
  10. Economics

    How does the Bureau of Labor Statistics determine the Consumer Price Index (CPI)?

    Changes in the average price level of more than 200 goods and services across the U.S. economy are used to determine the Consumer Price Index, or CPI.

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center