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Statistics Tutorial
LIBRARY
Adjusted R-Squared
Analysis of Variance
Arithmetic Mean
Arithmetic Median
TUTOR CONNECT
Arithmetic Mode
CODING GROUND
Arithmetic Range
Bar Graph
Beta Distribution
Binomial Distribution
Black-Scholes model
Boxplots
Chebyshev's Theorem
Chi-squared Distribution
Circular Permutation
Cluster sampling
Combination
Comparing plots
Cumulative Frequency
Co-efficient of Variation
Correlation Co-efficient
Cumulative plots
Data collection
Data Patterns
Deciles Statistics
Dot Plot
Exponential distribution
F distribution
F Test Table
Factorial
Frequency Distribution
Gamma Distribution
Geometric Mean
Goodness of Fit
Grand Mean
Gumbel Distribution
Harmonic Mean
Harmonic Number
Histograms
Hypergeometric Distribution
Hypothesis testing
Interval Estimation
Kurtosis
Laplace Distribution
Linear regression
Logistic Regression
Mcnemar Test
Mean Deviation
Means Difference
Multinomial Distribution
Normal Distribution
Outlier Function
Permutation
Pie Chart
Poisson Distribution
Power Calculator
Probability
Process Sigma
Quartile Deviation
Rayleigh Distribution
Reliability Coefficient
Residual analysis
Sample planning
Sampling methods
Scatterplots
Skewness
Standard Deviation
Standard Error ( SE )
Statistical Significance
Statistics Formulas
Statistics Notation
Stratified sampling
Student T Test
Sum of Square
T-Distribution Table
Ti 83 Exponential Regression
Transformations
Trimmed Mean
Variance
Venn Diagram
Statistics - Discussion
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R-squared measures the proportion of the variation in your dependent variable (Y) explained by your independent variables (X) for a linear
regression model. Adjusted R-squared adjusts the statistic based on the number of independent variables in the model.R2
shows how well terms (data points) fit a curve or line. Adjusted R2
also indicates how well terms fit a curve or line, but adjusts for the number of terms in a model. If you add more and more useless
variables to a model, adjusted r-squared will decrease. If you add more useful variables, adjusted r-squared will increase.
Adjusted R2adj
will always be less than or equal to R2
. You only need R2
when working with samples. In other words, R2
isn't necessary when you have data from an entire population.
Fm
oraul
(1 −R 2 ) (n −1 )
R2adj = 1− [ n −k−1 ]
Where −
n
= the number of points in your data sample.
k
= the number of independent regressors, i.e. the number of variables in your model, excluding the constant.
Example
Problem Statement:
A fund has a sample R-squared value close to 0.5 and it is doubtlessly offering higher risk adjusted returns with the sample size of 50 for 5
predictors. Find Adjusted R square value.
Solution:
Sample size = 50 Number of predictor = 5 Sample R - square = 0.5.Substitute the qualities in the equation,
( 1 − 0.52 ) ( 50 − 1 ) 49
R2adj = 1−[ 50 − 5 − 1
] = 1 − (0.75) × 44
, = 1 − 0.8352, = 0.1648
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