Building a handrail for your deck may seem like a simple task. In many cases it is -- until the time arrives to figure out how to get the balusters or spindles evenly spaced along the handrail. Evenly spaced spindles improve the symmetry of the rails and lend a professional look to the project. But finding the right measuring formula may give the average home handyman pause.
R-squared is a statistical measurement that determines the proportion of a security's return, or the return on a specific portfolio of securities, that can be explained by variations in the stock market, as measured by a benchmark index.
In short, the coefficient of determination or r-squared value, denoted r2, is the regression sum of squares divided by the total sum of squares. Alternatively, as demonstrated in this , since SSTO = SSR + SSE, the quantity r2 also equals one minus the ratio of the error sum of squares to the total sum of squares: