kmcintyre Elite    Posts: 890 Joined: 10/11/2012 Location: Portland, OR  User Profile | It dawned on me that I didn't explain why I prefer Linear Regression Slope to CAR or a % gain measurement... CAR (or % gain) is an instantaneous measure that relies on a single start and end point. The LR slope is a measure of trend that relies on (and reflects) all points within the time range specified. Points seldom lie on the LR line. If the start point is below the line and the end point in above the line, CAR is overstated. If the start point is above the line and the end point is below the line, CAR is understated. CAR will seldom reflect the true trend. The shorter the time frame, the more volatile the market, the more chance there is that CAR (or % change will misrepresent the trend. LR Slope is far better IMO. (Use log scale so the slope represents % change, not absolute change...) Cheers! Keith | |
