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Analysis of
Time Series
Presented By,
Subeesh.P.S.
Sivaraman.P.S.
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Time Series
It refers to values of a variable
chronologically ordered, over a
successive period of time.
It is dynamic distribution of which
reveals good deal of variations over
time.
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Analysis of Time Series
Analysis of Time Series
It is a statistical device used to understand, interpret, and It is a statistical device used to understand, interpret, and
evaluate changes in economic phenomena over time, with evaluate changes in economic phenomena over time, with
the hope of more correctly anticipating the course of future the hope of more correctly anticipating the course of future
events. events.
It is done to understand the dynamic conditions of the It is done to understand the dynamic conditions of the
variables that is being considered. variables that is being considered.
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Importance of Time
Importance of Time
Series Analysis
Series Analysis
It discloses the change in time &
It discloses the change in time &
change in values of variables.
change in values of variables.
It helps in understanding the past
It helps in understanding the past
behaviour.
behaviour.
It helps in predicting, forecasting &
It helps in predicting, forecasting &
planning.
planning.
It helps in evaluating current
It helps in evaluating current
programmes.
programmes.
It facilitates comparison.
It facilitates comparison.
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Components of Time Series
Components of Time Series
Secular Trend.
Secular Trend.
Seasonal Variations.
Seasonal Variations.
yclic Variations.
yclic Variations.
!rre"ular Variations.
!rre"ular Variations.
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Secular Trend
Secular Trend

Secular Trend
Secular Trend
, or
, or
Long Term Trend
Long Term Trend
, is the basic
, is the basic
tendency of a series to grow or decline over a period of
tendency of a series to grow or decline over a period of
time.
time.

It does not include short range oscillations.

It does not include short range oscillations.

It may also fluctuate about a constant level that does

It may also fluctuate about a constant level that does
not change with the passage of time.
not change with the passage of time.

Eg: - Rainfall in a locality would fuctuate;

Eg: - Rainfall in a locality would fuctuate;
but it will not rise or fall with the passage
but it will not rise or fall with the passage
of time.
of time.
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Seasona !ariations

Seasonal variations are those variations

which occur, with some degree of
regularity within a specifed period of
one year or shorter.

Almost every business & economic

activity is vulnerable to seasonal
variations.

They are quite regular & uniform and

can be predicted with some amount of
accuracy.
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Factors Responsible
Factors Responsible
Climate and Weather Conditions.
Climate and Weather Conditions.
Customs, Traditions & Habits.
Customs, Traditions & Habits.
Climate and Weather Conditions.
Climate and Weather Conditions.
Eg: - Sales of Umbrella will be more in Rainy
Eg: - Sales of Umbrella will be more in Rainy
Seasons.
Seasons.
Customs, Traditions & Habits.
Customs, Traditions & Habits.
Eg: - On Occasions of Deepavali, Christmas etc,
Eg: - On Occasions of Deepavali, Christmas etc,
there is great eman for the sweets an
there is great eman for the sweets an
gifts.
gifts.
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#y$i$ !ariations

Cyclical variations refer to recurring

pattern of changes in events over the
period etending beyond an year.

The !nowledge of cyclical "uctuations is

very useful in predicting the turning points
in business activity.

#ue to lac! of uniformity in cyclical period,

we cannot forecast them accurately.
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%rre&uar !ariations

They are those variations that results as a

part of unexpected, unusual, catastrophic
or accidental events.

All types of events that are not accounted

for by trend, seasonal and cyclic variations
are include in this category.

Effects of earthquakes, floods, epidemics,

strikes, lock outsetc.
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Analysis of Time Series
in #usiness
Primary Purpose: - to dis$over '
measure a ty(es o) variations in
business *hi$h $hara$terises a time
series.
Central Objective: - to de$om(ose
the various eements (resent in a
time series and to use them )or
business de$ision ma+in&.
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