(linear versus non-linear). A residual is the difference between what is plotted in your scatter plot at a specific point, and what the regression equation predicts should be plotted at this specific point. If the scatter plot and the regression equation agree on a y-value (no difference), the residual will be zero. Residual = Observed y-value-Predicted y-value. A residual is the difference between the observed y-value (from scatter plot) and the predicted y-value (from regression equation line).