Overview
Trend analysis is a technique used in time series analysis to identify the underlying direction of data over time. It helps in understanding whether a variable is generally increasing, decreasing, or staying stable.
Methods
- Moving Averages: Smoothing out short-term fluctuations to see the long-term trend.
- Linear Trend Line: Fitting a straight line to the data points.
- Percentage Change: Comparing values over different periods.
Importance
Helps businesses identify growth opportunities, predict future demand, and spot potential problems early.