Regression: which parameters to use and how to plot the data

In summary, Ducmod is learning about finance and regression, and wants to replicate the analysis in a file that he downloaded from a website. He does not understand which columns are used to perform a regression model. He has 3 independent variables (lagged DPS, annual EPS, and change in EPS) and would like to find predicted dividends.
  • #1
ducmod
86
0
Hello!
I am yet very weak in statistics, but I am learning some basic finance, and this requires to create regression.
Please, take a look at attached files - one excel that contains the results of regression and one screen shot of the window of StatPlus that I have to fill in. Before using my own data I would like to replicate the analysis presented in the file. I don't understand which columns are used to perform a regression model. There is part of data that computes variables for regression model, and it contains 4 columns. The goal is to find predicted dividends. So I assume that dividends per share is the dependent variable. But I still don't understand which columns I should use and how.
I will be very grateful for your help!
Thank you very much!
Edit: corrected the excel file, and added my results.
 

Attachments

  • Screen Shot 2016-05-17 at 6.38.05 PM.png
    Screen Shot 2016-05-17 at 6.38.05 PM.png
    29.9 KB · Views: 675
  • regression_model_test.xlsx
    53 KB · Views: 342
Last edited:
Physics news on Phys.org
  • #2
Hi Ducmod,
In your attached Excel sheet, the columns used for the regression are clearly marked. Columns G-J are titled "Data for Regression Model".

The model was described by:
##D_t = a + bD_{t-1}+cEPS_t+d(\Delta EPS)##
You are correct that the Dividend, ##D_t## is your dependent variable, and you have 3 independent variables for this model, ##D_{t-1}## is called the "lagged DPS", ##EPS_t## is the "annual EPS", and ##\Delta EPS## is the "change in EPS".

The coefficients for the model, a, b, c, and d, are listed in that order in your output table.

Does that address your question?
 
  • #3
RUber said:
Hi Ducmod,
In your attached Excel sheet, the columns used for the regression are clearly marked. Columns G-J are titled "Data for Regression Model".

The model was described by:
##D_t = a + bD_{t-1}+cEPS_t+d(\Delta EPS)##
You are correct that the Dividend, ##D_t## is your dependent variable, and you have 3 independent variables for this model, ##D_{t-1}## is called the "lagged DPS", ##EPS_t## is the "annual EPS", and ##\Delta EPS## is the "change in EPS".

The coefficients for the model, a, b, c, and d, are listed in that order in your output table.

Does that address your question?
Hello RUber,
Thank you very much for your answer. Yes, your answer does address my problem. I will now try to run regression again. It is very challenging for me )
Thank you!
 

1. What is regression analysis and how is it used?

Regression analysis is a statistical method used to analyze the relationship between a dependent variable and one or more independent variables. It is commonly used to predict or estimate the value of the dependent variable based on the values of the independent variables.

2. What are the parameters used in regression analysis?

The parameters used in regression analysis include the dependent variable, independent variables, regression coefficients, and intercept. The dependent variable is the variable being predicted, while the independent variables are the variables used to make the prediction. The regression coefficients represent the relationship between the dependent and independent variables, and the intercept is the value of the dependent variable when all independent variables are equal to zero.

3. How do I choose which parameters to use in regression analysis?

The parameters used in regression analysis should be chosen based on the research question or hypothesis being investigated. The dependent variable should be the outcome of interest, and the independent variables should be chosen based on their potential relationship with the dependent variable. It is also important to consider the assumptions of the regression model and choose variables that adhere to these assumptions.

4. How can I plot the data in a regression analysis?

The most common way to plot data in a regression analysis is to create a scatter plot with the independent variable on the x-axis and the dependent variable on the y-axis. The data points can then be connected with a line to visualize the relationship between the variables. Other types of plots, such as box plots or histograms, can also be used to examine the distribution of the variables.

5. What are some common mistakes to avoid when performing regression analysis?

Some common mistakes to avoid when performing regression analysis include not checking for outliers, not checking for non-linear relationships, and not assessing the assumptions of the regression model. It is important to thoroughly examine the data and the assumptions of the model to ensure valid and reliable results. It is also important to properly interpret the results and not make causal claims based on correlation.

Similar threads

  • Set Theory, Logic, Probability, Statistics
Replies
13
Views
2K
  • Set Theory, Logic, Probability, Statistics
Replies
23
Views
2K
  • Set Theory, Logic, Probability, Statistics
Replies
30
Views
2K
  • Set Theory, Logic, Probability, Statistics
2
Replies
64
Views
3K
  • Set Theory, Logic, Probability, Statistics
Replies
1
Views
6K
  • Set Theory, Logic, Probability, Statistics
Replies
1
Views
1K
  • STEM Educators and Teaching
Replies
11
Views
2K
  • Set Theory, Logic, Probability, Statistics
Replies
4
Views
2K
  • Set Theory, Logic, Probability, Statistics
Replies
11
Views
596
  • Set Theory, Logic, Probability, Statistics
Replies
2
Views
903
Back
Top