What is determination coefficient in SAP BI-RA-PA - SAP Predictive Analytics?

SAP Term: determination coefficient

• Component: BI-RA-PA

• Component Name: SAP Predictive Analytics

• Description: Ratio between the variability sum of squares of the prediction and the variability sum of squares of the data.

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• Key Concepts: 
  Determination coefficient is a measure of how well a model fits the data. It is used to evaluate the accuracy of a predictive model. The determination coefficient is calculated by taking the ratio of the sum of squares of the residuals (the difference between the observed values and the predicted values) to the total sum of squares (the difference between the observed values and the mean value). The higher the determination coefficient, the better the model fits the data. 
  
  How to use it: 
  In SAP Predictive Analytics, determination coefficient is used to evaluate the accuracy of a predictive model. It is calculated by taking the ratio of the sum of squares of the residuals to the total sum of squares. The higher the determination coefficient, the better the model fits the data. 
  
  Tips & Tricks: 
  When evaluating a predictive model, it is important to consider both accuracy and precision. The determination coefficient can be used to measure accuracy, while other measures such as mean absolute error or root mean squared error can be used to measure precision. 
  
  Related Information: 
  The determination coefficient is related to other measures such as R-squared and adjusted R-squared. R-squared measures how much variation in a dependent variable is explained by an independent variable, while adjusted R-squared takes into account the number of independent variables in a model.