# Ordinary Least Squares

*Math & Statistics — Finicade finance glossary*

Ordinary least squares fits a line by minimising the sum of squared residuals — the workhorse estimator of applied economics and finance. Squaring is what makes it tractable and what makes it fragile: large errors dominate the fit, so a handful of outliers can swing a coefficient completely. It is unbiased only when its assumptions hold, and most econometrics is the study of what to do when they don't.

**Also known as:** OLS, least squares regression, linear regression

**Related terms:** [Regression](https://finicade.com/glossary/regression), [Residual](https://finicade.com/glossary/residual), [R-Squared](https://finicade.com/glossary/r-squared), [Heteroskedasticity](https://finicade.com/glossary/heteroskedasticity), [Multicollinearity](https://finicade.com/glossary/multicollinearity)

Source: https://finicade.com/glossary/ordinary-least-squares