Explain the trend in forecasting
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Answers ( 3 )
Trend is also an important component of time series.
It shows how the time series is behaving over a long period of time.
We see in the above image that the values along the y-axis are increasing continuously
over a period of time and thus it is said that the time series has a positive trend.
If the values would have been decreasing over time, we would have said that it is
having a negative trend.
The trend shows the general tendency of the data to increase or decrease during a long period of time. A trend is a smooth, general, long-term, average tendency. It is not always necessary that the increase or decrease is in the same direction throughout the given period of time.
The trend shows the general tendency of the data to increase or decrease during a long period of time. A trend is a smooth, general, long-term, average tendency. It is not always necessary that the increase or decrease is in the same direction throughout the given period of time.
It is observable that the tendencies may increase, decrease or are stable in different sections of time. But the overall trend must be upward, downward or stable. The population, agricultural production, items manufactured, number of births and deaths, number of industry or any factory, number of schools or colleges are some of its example showing some kind of tendencies of movement.
Linear and Non-Linear Trend:
If we plot the time series values on a graph in accordance with time t. The pattern of the data clustering shows the type of trend. If the set of data cluster more or less round a straight line, then the trend is linear otherwise it is non-linear