UNIT 2: TIME SERIES

IT IS THE COLLECTION OF DATA RECORDER OVER A PERIOD OF TIME THAT IS WEEKLY, MONTHLY, QUARTERLY, HALF
YEARLY, AND ALL YEARLY.

TIME SERIES IS A SEQUENCE OF DATA XOINS TYPICALLY CONSISTING OF SUCCESSOR MEASUREMENT

USES OF TIME SERIES

ANALYSIS CAN BE USED BY MANAGEMENT TO MAKE CURRENT DECISIONS AND PLANS BASED ON LONG TERM
FORECASTING

EX: - SALES FORECASTING, STOCK MARKET ANALYSIS

COMPONENTS

LONG TERM IT IS A MAIN COMPONENT OF TIME SERIES WHICH RESULTS FROM LONG TERM EFFECT OF SOCIO
ECONOMICS AND POLITICAL FACTORS

THIS TREND MAY SLOW THE GROWTH/DECLINE IN A TIME SERIES OVER A LONG TERIOD

THIS PERIODS GENERALLY TAKES 8-10 YEARS OR MORE

FITTING A STRAIGHT LINE TREND (METHODS OF LEAST SQUARE)

FINDING THE TREND VALUES WITH THE HELP OF A MATHEMATICAL TECHNIQUE WHICH GIVES US A STRAIGHT LINE
TREND.IN OTHER WORDS LINE OF BEST FIT CAN BE OBTAINED BY THE REGRESSION Y ON X

IT IS A LINE FROM WHICH THE ACTUAL VALUES DEVIATES ON BOTH SIDES. THE SUM OF THE DEVIATIONS FROM THE
MEAN IS ZERO.

THE SUM OF THE SQUARES OF DEVIATIONS WILL BE LEAST AS COMPARED TO THE OTHER ALTERNATIVES (WHEN X=0)
THAT IS WHY THIS METHOD IS CALLED METHOD OF LEAST SQUARE.

Y=A+DX

GRPAHICAL PRESENTATION OF TREND VALUES

CONSIDER BOTH THE TIME VARIABLE AND THE OTHER VARIABLE DEPENDING ON TIME TO CONSTRUCT A TIME SERIES
GRAPH.

THE HORIAZONTAL X-AXIS IS USED TO PLOT THE TIME INCREMENTS AND THE VERTICAL Y-AXIS IS USED TO PLOT ON THE
GRAPH ARE CONNECTED BY A STRAIGHT LINE

REGRESSION EQUATION FOR TIME SERIES

Y ON X = Y=A+BX

WHERE-

NOTE: WHERE