Regression analysis is a set of statistical processes used to estimate the relationships between a dependent variable and one or more independent variables. It is a statistical method used in finance, investing, and other disciplines that attempts to determine the strength and character of the relationship between one dependent variable and a series of other independent variables. Regression analysis is primarily used for two conceptually distinct purposes. First, it is widely used for prediction and forecasting, where its use has substantial overlap with the field of machine learning. Second, in some situations, regression analysis can be used to infer causal relationships between the independent and dependent variables.

Regression analysis can be used to identify the associations between variables occurring in some data. It can show both the magnitude of such an association and also determine its statistical significance, i.e., whether or not the association is likely due to chance. Regression analysis is a powerful tool for statistical inference and has also been used to conduct preliminary data analysis and predict future trends in many fields, including biology and the behavioral, environmental, and social sciences.

The most common form of regression analysis is linear regression, in which one finds the line (or a more complex linear combination) that most closely fits the data according to a specific mathematical criterion. Linear regression is a data analysis technique that predicts the value of unknown data by using another related and known data value. It mathematically models the unknown or dependent variable as a function of the known or independent variable. Simple linear regression analysis uses a single straight line to determine the relationship between a single independent variable and a dependent variable.

Regression analysis is used to determine how many specific factors, such as the price of a commodity, interest rates, particular industries, or sectors, influence the price movement of an asset. It is also used to explain a phenomenon that companies want to understand, predict things about the future, or determine the associations between variables occurring in some data.