Regression analysis allows you to analyze the relationship between two financial variables, and identify whether there is a linear trend in the data.
Where do I find it?
Regression analysis is available in the Regression Analysis view under Charts (Companies and My List interfaces).
What do I need to know?
Linear regression examines the linear relationship between two variables, and when both variables are related provides the line that best fits the data. It can be used in two ways:
- either choosing a predefined analysis from the Predefined Analyses dropdown box;
- or for the User Settings option selecting separately the variables for the X and Y axes in the Chart Settings section.
The default view shows the scatter plot for the selected company vs. the predefined list of international peers (Companies interface), or for the selected personal list (My Lists interface). You can modify the selected list in Active List.
Each company appears on the chart as a point colored according to the legend displayed next to the peer group. Company names or company numbers can be shown using the options available below the chart. You also have the ability to deselect individual companies to check how this affects the degree of correlation between the chosen variables. The chart indicates the coefficient of determination or R², as well as the equation of the regression line that best fits the data.
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