What is 'RSquared'
Rsquared is a statistical measure that represents the percentage of a fund or security's movements that can be explained by movements in a benchmark index. For fixedincome securities, the benchmark is the Tbill. For equities, the benchmark is the S&P 500.
BREAKING DOWN 'RSquared'
Rsquared values range from 0 to 100. An Rsquared of 100 means that all movements of a security are completely explained by movements in the index. A high Rsquared (between 85 and 100) indicates the fund's performance patterns have been in line with the index. A fund with a low Rsquared (70 or less) doesn't act much like the index.
A higher Rsquared value will indicate a more useful beta figure. For example, if a fund has an Rsquared value of close to 100 but has a beta below 1, it is most likely offering higher riskadjusted returns. A low Rsquared means you should ignore the beta.

RiskAdjusted Return
A concept that refines an investment's return by measuring how ... 
Index Hugger
A managed mutual fund that tends to perform much like a benchmark ... 
Coefficient of Determination
A measure used in statistical model analysis to assess how well ... 
Benchmark
A standard against which the performance of a security, mutual ... 
Benchmark For Correlation Values
A benchmark or point of reference chosen by an investment fund ... 
Bogey
A buzzword that refers to a benchmark used to evaluate a fund's ...

Investing Basics
RSquared
Learn more about this statistical measurement used to represent movement between a security and its benchmark. 
Mutual Funds & ETFs
5 Ways To Measure Mutual Fund Risk
These statistical measurements highlight how to mitigate risk and increase rewards. 
Mutual Funds & ETFs
PTTRX: A Risk Statistics Case Study
Analyze the risk metrics of the mutual fund PTTRX. Find out what standard deviation, capture ratios and Rsquared indicate about correlation and volatility. 
Mutual Funds & ETFs
Measuring Performance
Measuring Performance 
Mutual Funds & ETFs
DODFX: A Risk Statistics Case Study
Explore the risk metrics of mutual fund DODFX. Learn how beta, Rsquared, capture ratios and standard deviation measure systematic and volatility risk. 
Fundamental Analysis
How Investment Risk Is Quantified
FInancial advisors and wealth management firms use a variety of tools based in Modern portfolio theory to quantify investment risk. 
Mutual Funds & ETFs
DODIX: A Risk Statistics Case Study
Learn about the risk metrics of the DODIX Fund. Discover what standard deviation, capture ratios and Rsquared indicate about systematic risk and volatility. 
Mutual Funds & ETFs
VWELX: A Risk Statistics Case Study
Explore several risk metrics of VWELX. Learn what beta, Rsquared, capture ratios and standard deviation say about volatility and systematic risk for VWELX. 
Mutual Funds & ETFs
FSPHX: A Risk Statistics Case Study
Analyze the risk metrics of FSPHX. Find out what beta, standard deviation and Rsquared imply about volatility and market correlation. 
Mutual Funds & ETFs
PRWCX: A Risk Statistics Case Study
Analyze PRWCX using popular risk metrics that are part of modern portfolio theory (MPT). Explore PRWCX's volatility, correlation and return statistics.

Where do funds report their rsquared?
Learn where to find Rsquared calculations for mutual funds. Explore Rsquared, Alpha and Beta and how these calculations ... Read Answer >> 
What's the difference between rsquared and adjusted rsquared?
Learn how Rsquared and adjusted Rsquared values differ, how they are calculated, the relationship between them and how ... Read Answer >> 
What's the relationship between r squared and beta?
Learn about the relationship between Rsquared and Beta. Explore how the concepts are related and often used in conjunction ... Read Answer >> 
What's the difference between rsquared and correlation?
Discover how Rsquared calculations determine the practical usefulness of beta and alpha correlations between individual ... Read Answer >> 
How is correlation used to measure volatility?
See how the correlation between an asset and its benchmark index can be used as a proxy to determine the relative volatility ... Read Answer >> 
How do you calculate rsquared in Excel?
Calculate Rsquared in Microsoft Excel by creating two data ranges to correlate. Use the Correlate formula to correlate both ... Read Answer >>