In this guide, we’re going to show you how to do linear regression in Excel.

## Linear regression

Linear regression is a statistical analysis tool t find the correlation between two factors. It is calculated using the following formula, which shows how *y* is related to *x*:

where,

- y:
*Dependent variable* - b: the slope of the regression line
- x:
*Independent variable* - a: y-intercept, a point where the regression line intersects y-axis
- ε:
*Error term*, all other factors which influence*the dependent variable (y)*other than*the independent variable (x)*.

Fortunately, you don't have to memorize this formula to apply it to your data model. Excel has a built-in formula for this.

## Doing linear regression in Excel

The easiest way to do linear regression in Excel is using a chart and a trendline. Let's take a look at how this works.

- Select a cell in your data.
- Create a scatter chart by following
**Insert > Insert Scatter Chart (X, Y) or Bubble Chart > Scatter**. - To add a trendline, click the big plus (+) button (Chart Elements) and select
**Linear**under the**Trendline**item. - Once the trendline is added, double-click on it to display the properties pane on the right side.
- Make sure to enable
**Display equation on the chart.** - (Optional) Open the
**Fill & Line**section to modify your trendline. You can change its color or the line type.

We changed the color of the trendline and adjusted the x-axis for better visibility.

## What does the trendline tell us?

You can see how the two factors are related by the trendline slope.

**Positive slope (upward trend):**The independent variable increases, the dependent variable also increases.**Negative slope (downward trend):**The independent variable increases, the dependent variable decreases.

**Horizontal line:** A horizontal line means that there is no correlation between the independent and dependent variables.