R2 (or R-squared)

Measures the degree of explanation that can be made about movement in the fund by a movement in the benchmark. Also measurement of investment risk that shows how closely the portfolio´s performance correlates with the performance of a benchmark index such as the Standard and Poor´s® 500 Index -- and thus indicates how closely that performance is linked to the broad market. A high R2 signifies that the portfolio´s fluctuations generally reflect market moves, while a low R2 indicates that other factors tend to drive fund performance. A value of 100 equals 100% explanation. R Squared is also know as ´goodness of fit´.