R-squared is a number between 0 and 1 that indicates how well a regression model can explain the relationship between the two variables in the model, or how well the data fits the model.

Let's understand what is R-Squared in a mutual fund factsheet. 1. R-squared is a statistical measure that indicates how closely a mutual fund’s performance correlates with a benchmark index.

If there is no intercept in the model, the corresponding measure (Theil 1961) is Clearly, in the case of OLS estimation, both the R-squared formulas given here reduce to the usual R-squared formula.