Linear regression is a form of statistical analysis that shows the relationship between two or more continuous variables. It creates a predictive model using relevant data to show trends. Analysts typically use the “least square method” to create the model. There are other methods, but the least square method is the most commonly used.
Below is a graph that depicts the relationship between the heights and weights of a sample of people. The red line is the linear regression that shows the height of a person is positively related to its weight.
Now that we understand what linear regression is, let’s learn how linear regression works and how we use the linear regression formula to derive the regression line.