Contents
How do you know if Beta is statistically significant?
The t-test assesses whether the beta coefficient is significantly different from zero. If the beta coefficient is not statistically significant (i.e., the t-value is not significant), the variable does not significantly predict the outcome. If the beta coefficient is significant, examine the sign of the beta.
What does the Y intercept α tell you?
The angle of the line is called the slope (m) and the point where the line crosses the vertical axis is called the Y-intercept. Modern finance believes that the slope is the Beta and the Y-intercept is the Alpha. A slope greater than 1.0 means ABC is moving more than the index.
What do the values in the regression equation mean?
The regression equation is written as Y = a + bX +e. Y is the value of the Dependent variable (Y), what is being predicted or explained. a or Alpha, a constant; equals the value of Y when the value of X=0. b or Beta, the coefficient of X; the slope of the regression line; how much Y changes for each one-unit change in …
What does B mean in SPSS?
B – These are the values for the regression equation for predicting the dependent variable from the independent variable. These are called unstandardized coefficients because they are measured in their natural units.
Why is y-intercept negative?
If you extend the regression line downwards until you reach the point where it crosses the y-axis, you’ll find that the y-intercept value is negative! If the independent variables can’t all equal zero, or you get an impossible negative y-intercept, don’t interpret the value of the y-intercept!
How do you interpret alpha in regression?
Alpha, the vertical intercept, tells you how much better the fund did than CAPM predicted (or maybe more typically, a negative alpha tells you how much worse it did, probably due to high management fees). The quality of the fit is given by the statistical number r-squared.