Linear Regression Analysis 9 / 10

Advantages & Disadvantages

Advantages of Linear Regression

  • A reliable approach to forecasting, using mathematical principles

  • Can use many date sets (unlike high-low, which uses only 2) so should be more accurate

Disadvantages of Linear Regression

  • It is only valid where the relationships involved are linear.

  • It still uses past data

  • It is a more complex technique to apply, requiring the mathematical derivation of values for a and b in the regression equation.

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