Definition of R-Squared

Financial Terms Beginning with R

What is R-Squared

R-squared is a measure of the relationship between a portfolio and its benchmark index. It is expressed as a percentage from 1 to 100.

  • A portfolio with a 70-100 r-squared score has a high correlation between the portfolio’s returns and the benchmark’s returns.
  • A portfolio with a 40-70 r-squared score has an average correlation between the portfolio’s returns and the benchmark’s returns.
  • A portfolio with a 1-40 r-squared score has a low correlation between the portfolio’s returns and the benchmark’s returns.

R-squared is one of five popular technical investment risk-reward ratios. The other risk-reward ratios are alpha, beta, standard deviation and the Sharpe ratio.

GlobEx Markets Financial Dictionary of Terms, Phrases and Concepts

The GlobEx Markets financial dictionary is a reference resource that provides the definitions and explanations of various financial terms, phrases and concepts that are used in international finance and global investing. It includes a broad range of financial terms, such as those related to stocks, bonds, currencies, commodities, options, futures, crypto and much more.

A financial dictionary can be useful for anyone who wants to learn more about finance and investing, or who works in the financial industry. It can help clarify the meaning of technical terms and the language used in financial publications, reports and other sources.

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There are several benefits to using the GlobEx Markets financial dictionary, including:

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Overall, the GlobEx Markets financial dictionary can help improve your understanding of international finance and global investing. It is a valuable tool for anyone who works in the financial industry or who wants to improve their financial literacy.

Related Investment Terms

Alpha

Hedge Fund

Risk Ratio

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