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Time series

This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.

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December 26, 2021 at 5:15 am #644834
Isabella1
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Chapter 20- Opentuition notes
You said and it is written that Trend is underlying patter of time series when short term fluctuations are ignored.
My question arises that Trend do account for Long term fluctuations (Cyclical fluctuations)? In book, it is also saying that despite various fluctuation caused by seasonality (short term variations). And lastly, what about random (or residual) variations, do trend accounts for them or it also ignores it?
December 26, 2021 at 3:39 pm #644864
John Moffat
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The trend would be adjusted for long-term fluctuations, but there are ignored in the exam because the forecasting is only done for the short-term.
Random variations cannot be accounted for, because they are random and so cannot be ‘predicted”.
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