Gravity equation 


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Gravity equationAn estimated equation of the gravity model.Similar MatchesBeta equation (security)Beta equation (security)The market beta of a security is determined as follows: Regress beta of stock y on excess returns of the market. The slope coefficient is beta. Define n as number of observation numbers. Beta= [(n) (sum of [xy]) ][ (sum of x) (sum of y)]/ [(n) (sum of [xx]) ][ (sum of x) (sum of x)] where: n = # of observations (usually 36 to 60 months) x = rate of beta for the S&P 500 index y = rate of return for the security. Related: beta Regression equationRegression equationAn equation that describes the average relationship between a dependent variable and a set of explanatory variables. 
