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Dear Executive,
*   Excel :: Regression Tips for Charts   *

Using the Add Trendline when charting is a useful tool, but some may not be taking advantage of the available options.  Two options which are helpful to know are - forward and display equation.  The forward allows you to advance your data, and instantly see the 'what-if' results.  The display equation provides an instant regression analysis of your data, providing the equation and R-squared value to determines its goodness of fit.  Lets examine the chart below to see how each option is used.

We started with a scatter plot of data represented by the orange diamonds, and would like to make an estimate of where that data would be if allowed to move forward two units.  We right click on the y data points and select the option Add Trendline and under Type, we select Linear.  Now the solid blue line appears.  See the chart, y Data Regression 1 below.

We lack two things: What is the equation for that line, and how good does it fit our data?   Why is that important you may ask?   If we have the equation for that line, we can calculate y, for any value of x.  Secondly, we would like some confidence that the trendline has a good approximation, or fit to our data.  Let's move down to the chart y Data Regression 2 - for the answers.

Graph 1

We right-click on the y data again, because we want to add another trendline, select Linear and go to Options. Under Options we want to go to Forecast and click Forward until it advances by two units.  Before we leave Options, check the boxes for Display equation on chart, and Display R-squared value on chart.  Your chart won't look exactly like the one below, but you will have the equation and R-squared value on your chart and the trendline will extend two units so it reaches the end of the chart.  

Graph 2

You don't have to leave the equation on your chart, the purpose was to get it for future use, and find out what the R-squared value was.   The rule-of-thumb for the R-squared value is that the closer it is to 1.0, the better the trendline approximates your data.  To learn more, look-up the Method of Least Squares...  

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