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Forecasting using the linear regression

This recipe illustrates the method of estimating the future values based on the linear trend. The linear trend is calculated using the least-square distance, a statistical method of determining the line that fits the best through the set of values in the chart, as displayed on the image below:

There are two characteristics that describe the trend line: the slope and the intercept. They are the necessary ingredients in the regression line equation: y = a ∙ x + b. The "a" in the equation is the slope, growth rate or the gradient. When positive, the line progresses with values with every increase of the "x" in ...

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