Linear Regression Introduction

In Vanguard AI you can also use Linear Regression. A classic statistical problem is to try to determine the relationship between two random variables X and Y such as the closing price of a stock over time. Linear
regression attempts to explain the relationship with a straight line fit to the data.

The linear regression model postulates that Y = a + bX + e

Where the “residual” e is a random variable with mean zero. The coefficients a and b are determined by the condition that the sum of the square residuals is as small as possible. The indicators in this section are based upon this model.