R-squared values range from 0 to 1, indicating the fit and explanatory power of a regression model. Values below 0.3 suggest weak explanatory power; above 0.7 indicate strong relationships. In finance ...

In Part 3 of our series on modern portfolio theory, we discuss how R-squared can determine the usefulness of other MPT statistics. In a recent article, we went over how beta and other modern portfolio ...

Detecting dependence between two random variables is a fundamental problem. Although the Pearson correlation coefficient is effective for capturing linear dependence, it can be entirely powerless for ...