How does R-squared help in assessing the relationship between Ethereum's market capitalization and trading volume?

Can you explain how R-squared is used to evaluate the correlation between Ethereum's market capitalization and trading volume? How does this statistical measure help in understanding the relationship between these two variables?

1 answers
- R-squared is a statistical measure that helps evaluate the relationship between Ethereum's market capitalization and trading volume. It quantifies the proportion of the variance in market capitalization that can be explained by changes in trading volume. A high R-squared value indicates a strong correlation, meaning that trading volume has a significant impact on Ethereum's market capitalization. On the other hand, a low R-squared value suggests a weak relationship, indicating that trading volume has minimal influence on market capitalization. By using R-squared, investors and analysts can better understand the dynamics between market capitalization and trading volume, allowing them to make more informed decisions regarding Ethereum investments.
Mar 19, 2022 · 3 years ago
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