Time Series Flashcards
What is a time series?
A set of data that is collected at regular intervals of time
What is time series data used for?
Understanding cause and effect AND Making decisions about the future
In a time series what is a trend?
The general direction (increasing or decreasing) in which the series is running over a long period
In a time series what is seasonality?
A relatively short term repetitive pattern of fluctuations from the trend
In a time series what are cyclical changes?
Patterns of highs and lows in the data over time periods, usually of more than a year
In a time series, what is residual variation?
Random, irregular or unexpected fluctuations
Why do statisticians aim to smooth out the variations?
So that the underlying trend becomes more visible
How can you smooth out variations?
Moving averages - replaces each observation with an average based on nearby observations
What does r mean in a time series?
Point moving average
What is the moving average of the order of r?
The mean of every set of r consecutive values in a time series
What do we do with every moving average?
Match it to a date on the original time series
What do we do with the moving average when it is an odd number?
Use the same time point of the middle observation
What do we do with the moving average when it is an even number?
1) calculate the moving average 2) take the average of each adjacent pair of moving averages and then match it against the ‘third’ data point and so on
When the time series does not have any seasonality, what order should you use?
You should use moving averages of fairly low order
When the time series is seasonal, what order should you use?
Select a moving average of order equal to the period - which is the number of time points in its cycle of repetition
What is the mean absolute deviation formula?
xi = actual value
Fi = forecast value
