Goodness of Fit (R-squared) and Trend
The least-squares fitting process produces a value – r-squared (r2) – which is the square of the residuals of the data after the fit. It says what fraction of the variance of the data is explained by the fitted trend line. It does not relate to the statistical significance of the trend line (see graph); statistical significance of the trend is determined by its t-statistic. Often, filtering a series increases r2 while making little difference to the fitted trend.
Read more about this topic: Trend Estimation
Famous quotes containing the words goodness and/or fit:
“Bert McAnny: Now for goodness sake, Green, don’t get me wrong. Why, some of my best friends ...
Anne: I know, dear. And some of your other best friends are Methodists, but you never bother to say it.”
—Moss Hart (1904–1961)
“Some say that happiness is not good for mortals, & they ought to be answered that sorrow is not fit for immortals & is utterly useless to any one; a blight never does good to a tree, & if a blight kill not a tree but it still bear fruit, let none say that the fruit was in consequence of the blight.”
—William Blake (1757–1827)