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Modeling consecutive returns

Let's quantify the relationship between returns in 2019 and 2018 by running a linear regression and making predictions. By looking at companies with extremely high or extremely low returns in 2018, we can see if their performance was similar in 2019.

sp500_yearly_returns is available and ols() is loaded.

This exercise is part of the course

Introduction to Regression with statsmodels in Python

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Hands-on interactive exercise

Have a go at this exercise by completing this sample code.

# Run a linear regression on return_2019 vs. return_2018 using sp500_yearly_returns
mdl_returns = ____

# Print the parameters
____
Edit and Run Code