How to calculate coefficient of determination correctly
WHAT IS THE CO-EFFICIENT OF DETERMINATION? Coefficient of determination is also called R-SQUARED (r²). it is used to explain the relationship between independent variable and dependent variables. Business investors use coefficient of determination to conduct trend analysis. Coefficient of determination is a further statistical treatment of Regression analysis. In regression analysis there are three types of variation namely; total variation explained variation unexplained variation the purpose of regression analysis is to try to allocate as much of the total variation in Y in the variation of X variable. This variation should there be as high as possible. NOW THEREFORE, co-efficient of variation expresses the proportion of varience in Y determined in X. We can now define coefficient of determination as the ratio of explained variation to the total variation . It is used to measure the strength of the linear relationship.The stronger the linear relation the high the value of ...