I'm trying to understand how to interpret a regression output when the dependent variable is weekly stock market return. I have calculated the return variable as the weekly percentage change in the S&P500 price index.
The way I interpret a coefficient of 0.85 is that a one unit increase in X is associated with an increase of 0.85 percentage points in weekly returns. To illustrate, if the weekly return had been 4%, now it would be 4.85%.
Is this the correct way to interpret the coefficient of 0.85?
Most importantly, how can I calculate what basis point change this percentage change corresponds to? How should I go about figuring out the change in annual returns?
Grateful for any insights!
