Limitations of Regression Analysis 7 / 8

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.

We use cookies to help make our website better. We'll assume you're OK with this if you continue. You can change your Cookie Settings any time.

Cookie SettingsAccept