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 ...

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 ...

Daniel Jassy, CFA, is an Investopedia Academy instructor and the founder of SPYderCRusher Research. He contributes to Excel and Algorithmic Trading. Amy is an ACA and the CEO and founder of OnPoint ...

Mary Hall is a editor for Investopedia's Advisor Insights, in addition to being the editor of several books and doctoral papers. Mary received her bachelor's in English from Kent State University with ...

When people invest in mutual funds, they usually look at returns, ratings and past performance. But there is one number that quietly explains how predictable a fund’s behaviour is — the R-squared ...

R-squared – or the coefficient of determination – is a statistical measure that represents the percentage of a fund or security's movements that can be explained by movements in a benchmark index.