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R-squared (R2)

Definition

R-squared (R2) is a statistical measure that represents the proportion of variance explained by the regression model in relation to the total variance observed in the data. It ranges from 0 to 1 and indicates how well the model fits the data.

Analogy

Think of R-squared as a score given to your favorite video game character's outfit customization. If your character's appearance perfectly matches your preferences, then their outfit has an R-squared value close to 1. However, if their appearance doesn't align with what you had in mind at all, then their outfit has an R-squared value closer to 0.

Related terms

Regression Analysis: A statistical technique used to model and analyze relationships between variables.

Coefficient of Determination: Another term for R-squared (R2), which measures how much variation in one variable can be explained by another variable.

Overfitting: When a regression model becomes too complex and starts fitting the noise in the data rather than the underlying pattern.