ACHIEVERS UNIVERSITY OWO,

ONDO STATE

PROJECT BY

200 LEVEL ECONOMICS

DEPARTMENT (MALE)

COURSE CODE: ECO 222

TOPIC: ANALYSIS TIME SERIES

DATA

LECTURER: MR I.J JONAH

S/N NAMES MATRIC NO
1. Adekolu Oluwabukunmi AU21CE3792
2. Adesanoye Ayomide Emmanuel AU22CE5249
3. Akorede Afeez Opeyemi AU21CE3794
4. Babatunde Israel Opeyemi AU21CE4352
5. Elijah Emmanuel Ovie AU21CE3797
6. Odebunmi Alhameen A. AU21CE3642
7. Oladipo Ramadan Olamilekan AU21CE3799
 TIME SERIES ANALYSIS DATA
Time-series analysis is a method of analyzing data to extract useful statistical
information and characteristics. One of the study's main goals is to predict
future value. When forecasting with time series analysis, which is extremely
complex, extrapolation is required.

Time series analysis is a statistical technique that deals with time series data, or
trend analysis. Time-series data is a collection of data points over a set period.
Time series data means that data is in a series of particular time, periods or
intervals.

The data is considered in three types:

Time series data: A set of observations on the values that a variable takes at
different times.
Cross-sectional data: consists of several variables recorded at the same time.
Pooled data: A combination of time series data and cross-sectional data.

A time series data can be collected Yearly, Monthly, Quarterly, Weekly, Daily
or even Hourly.

Time series data is a collection of observations obtained through repeated

measurements over time.

UNDERSTANDING TIME SERIES

A time series can be taken on any variable that changes over time. In investing,
it is common to use a time series to track the price of a security over time. This
can be tracked over the short term, such as the price of a security on the hour
over the course of a business day, or the long term, such as the price of a
security at close on the last day of every month over the course of five years.

Time series analysis can be useful to see how a given asset, security, or
economic variable changes over time. It also can be used to examine how the
changes associated with the chosen data point compare to shifts in other
variables over the same time period.

Time series is also used in several nonfinancial contexts, such as measuring the
change in population over time. The figure below depicts such a time series for
the growth of the U.S. population over the century from 1900 to 2000.
A time series graph of the population of the United States from 1900 to 2000.
C.K. Taylor

WHY ORGANIZATIONS USE TIME SERIES DATA

ANALYSIS
Time series analysis helps organizations understand the underlying causes of
trends or systemic patterns over time. Using data visualizations, business users
can see seasonal trends and dig deeper into why these trends occur. With
modern analytics platforms, these visualizations can go far beyond line graphs.

Time series analysis is a statistical technique that is used to analyze data that is
collected over time. It involves studying the patterns and trends in the data to
make predictions about future values. This type of analysis is used in a wide
variety of fields, including finance, economics, weather forecasting, and more.
When organizations analyze data over consistent intervals, they can also use
time series forecasting to predict the likelihood of future events. Time series
forecasting is part of predictive analytics. It can show likely changes in the data,
like seasonality or cyclic behavior, which provides a better understanding of
data variables and helps forecast better.
For example, Achievers University analyzed five years of student
achievement data to identify at-risk students and track progress over time.

There are several different methods that can be used in time series analysis,
including:
1. TREND ANALYSIS: This involves analyzing the overall trend of the data
over time. For example, if the data shows a steady increase over time, then it
has a positive trend.
2. SEASONAL ANALYSIS: This involves analyzing the patterns that repeat
over a specific period of time. For example, sales data for a retail store may
show a seasonal pattern, with higher sales during the holiday season.
3. CYCLICAL ANALYSIS: This involves analyzing the patterns that repeat
over a longer period of time, such as an economic cycle.
4. AUTOREGRESSIVE INTEGRATED MOVING AVERAGE (ARIMA):
This is a popular time series forecasting method that models the data as a
combination of autoregressive (AR), integrated (I), and moving average (MA)
components.
5. EXPONENTIAL SMOOTHING: This is a time series forecasting method
that uses a weighted average of past observations to predict future values.

TIME SERIES ANALYSIS EXAMPLES

Time series analysis is used for non-stationary data—things that are constantly
fluctuating over time or are affected by time. Industries like finance, retail, and
economics frequently use time series analysis because currency and sales are
always changing. Stock market analysis is an excellent example of time series
analysis in action, especially with automated trading algorithms. Likewise, time
series analysis is ideal for forecasting weather changes, helping meteorologists
predict everything from tomorrow’s weather report to future years of climate
change. Examples of time series analysis in action include:

 Weather data
 Rainfall measurements
 Temperature readings
 Heart rate monitoring (EKG)
 Brain monitoring (EEG)
 Quarterly sales
 Stock prices
 Automated stock trading
 Industry forecasts
 Interest rates

Suppose you wanted to analyze a time series of daily closing stock prices for a
given stock over a period of one year. You would obtain a list of all the closing
prices for the stock from each day for the past year and list them in
chronological order. This would be a one-year daily closing price time series for
the stock.

Delving a bit deeper, you might analyze time series data with technical analysis
tools to know whether the stock’s time series shows any seasonality. This will
help to determine if the stock goes through peaks and troughs at regular times
each year. Analysis in this area would require taking the observed prices and
correlating them to a chosen season. This can include traditional calendar
seasons, such as summer and winter, or retail seasons, such as holiday seasons.

Alternatively, you can record a stock’s share price changes as it relates to an

economic variable, such as the unemployment rate. By correlating the data
points with information relating to the selected economic variable, you can
observe patterns in situations exhibiting dependency between the data points
and the chosen variable.

TIME SERIES FORECASTING

Time series forecasting uses information regarding historical values and

associated patterns to predict future activity. Most often, this relates to trend
analysis, cyclical fluctuation analysis, and issues of seasonality. As with all
forecasting methods, success is not guaranteed.
 TIME SERIES ANALYSIS TYPES

Because time series analysis includes many categories or variations of data,

analysts sometimes must make complex models. However, analysts can’t
account for all variances, and they can’t generalize a specific model to every
sample. Models that are too complex or that try to do too many things can lead
to a lack of fit. Lack of fit or overfitting models lead to those models not
distinguishing between random error and true relationships, leaving analysis
skewed and forecasts incorrect.

Models of time series analysis include:

 Classification: Identifies and assigns categories to the data.

 Curve fitting: Plots the data along a curve to study the relationships of
variables within the data. (graph)
 Descriptive analysis: Identifies patterns in time series data, like trends,
cycles, or seasonal variation.
 Explanative analysis: Attempts to understand the data and the
relationships within it, as well as cause and effect.
 Exploratory analysis: An approach to analyzing data that involves
summarizing and visualizing the main characteristics of the data.
 Forecasting: Predicts future data. This type is based on historical trends.
It uses the historical data as a model for future data, predicting scenarios
that could happen along future plot points.
 Intervention analysis: Studies how an event can change the data.it
involves the before and after the intervention to see if there is a
significant difference in the trend or level of the series.
 Segmentation: Splits the data into segments to show the underlying
properties of the source information.

TIME SERIES ANALYSIS MODELS AND TECHNIQUES

Just as there are many types and models, there are also a variety of methods to
study data. Here are the three most common.

 Box-Jenkins ARIMA models: These univariate models are used to

better understand a single time-dependent variable, such as temperature
over time, and to predict future data points of variables. These models
work on the assumption that the data is stationary. Analysts have to
account for and remove as many differences and seasonalities in past data
points as they can. Thankfully, the ARIMA model includes terms to
account for moving averages, seasonal difference operators, and
autoregressive terms within the model.
  Box-Jenkins Multivariate Models: Multivariate models are used to
analyze more than one time-dependent variable, such as temperature and
humidity, over time.
 Holt-Winters Method: The Holt-Winters method is an exponential
smoothing technique. It is designed to predict outcomes, provided that the
data points include seasonality.

Time series analysis has a wide range of applications and is one of the most
important areas of study. It plays an important role in forecasting models and
meaningful statistical characteristics.

HOW DO YOU ANALYZE TIME SERIES DATA?

Statistical techniques can be used to analyze time series data in two key ways:
to generate inferences on how one or more variables affect some variable of
interest over time, or to forecast future trends. Unlike cross-sectional data,
which is essentially one slice of a time series, the arrow of time allows an
analyst to make more plausible causal claims.

WHAT IS THE DISTINCTION BETWEEN CROSS-SECTIONAL AND

TIME SERIES DATA?

A cross section looks at a single point in time, which is useful for comparing
and analyzing the effect of different factors on one another or describing a
sample. Time series involves repeated sampling of the same data over time. In
practice, both forms of analysis are commonly used, and when available, they
are used together.

HOW ARE TIME SERIES USED IN DATA MINING?

Data mining is a process that turns reams of raw data into useful information.
By utilizing software to look for patterns in large batches of data, businesses can
learn more about their customers to develop more effective marketing
strategies, increase sales, and decrease costs. Time series, such as a historical
record of corporate filings or financial statements, are particularly useful here to
identify trends and patterns that may be forecasted into the future.

TIME SERIES CONSIDERATIONS

Immutability – Since time series data comes in time order, it is almost always
recorded in a new entry, and as such, should be immutable and append-only
(appended to the existing data). It doesn’t usually change but is rather tacked on
in the order that events happen. This property distinguishes time series data
from relational data which is usually mutable and is stored in relational
databases that do online transaction processing, where rows in databases are
updated as the transactions are run and more or less randomly; taking an order
for an existing customer, for instance, updates the customer table to add items
purchased and also updates the inventory table to show that they are no longer
available for sale.

The fact that time series data is ordered makes it unique in the data space
because it often displays serial dependence. Serial dependence occurs when the
value of a datapoint at one time is statistically dependent on another datapoint in
another time (read “Autocorrelation in Time Series Data” for a detailed
explanation about this topic).

Though there are no events that exist outside of time, there are events where
time isn’t relevant. Time series data isn’t simply about things that happen in
chronological order — it’s about events whose value increases when you add
time as an axis. Time series data sometimes exists at high levels of granularity,
as frequently as microseconds or even nanoseconds. With time series data,
change over time is everything.

Different forms of time series data – Time series data is not always numeric
— it can be int64, float64, bool, or string.

HOW IS TIME SERIES DATA UNDERSTOOD AND USED?

Time series data is gathered, stored, visualized and analyzed for various
purposes across various domains:

1. In data mining, pattern recognition and machine learning, time series

analysis is used for clustering, classification, query by content, anomaly
detection and forecasting.
2. In signal processing, control engineering and communication engineering,
time series data is used for signal detection and estimation.
3. In statistics, econometrics, quantitative finance, seismology, meteorology,
and geophysics the time series analysis is used for forecasting.

Time series data can be visualized in different types of charts to facilitate

insight extraction, trend analysis, and anomaly detection. Time series
visualization and dashboarding tools include the InfluxDB UI and Grafana.

The term 'time series patterns' describes long-term changes in the series.
Whether measured as a trend, seasonal, or cyclic pattern, the correlation can be
calculated in a number of ways (linear, exponential, etc.), and the direction may
change at any given time.

Time series data is used in time series analysis (historical or real-time) and time
series forecasting to detect and predict patterns — essentially looking at change
over time. Following is a brief overview of each.
WHERE IS TIME SERIES DATA STORED?

Time series data is often ingested in massive volumes and requires a purpose-
built database designed to handle its scale. Properties that make time series data
very different than other data workloads are data lifecycle management,
summarization, and large range scans of many records. This is why time series
data is best stored in a time series database built specifically for handling
metrics and events or measurements that are time-stamped.

ADVANTAGES OF TIME SERIES ANALYSIS

Data analysts have much to gain from time series analysis. From cleaning raw
data, making sense of it, and uncovering patterns to help with projections much
can be accomplished through the application of various time series models.

Here are a few advantages of time series analysis:

1. It Cleans Data and Removes Confounding Factors: Data cleansing filters

out noise, removes outliers, or applies various averages to gain a better
overall perspective of data. It means zoning in on the signal by filtering out
the noise. The process of time series analysis removes all the noise and
allows businesses to truly get a clearer picture of what is happening day-to-
day.
2. Provides Understanding of Data: The models used in time series analysis
do help to interpret the true meaning of the data in a data set, making life
easier for data analysts. Autocorrelation patterns and seasonality measures
can be applied to predict when a certain data point can be expected.
Furthermore, stationarity measures can gain an estimate of the value of said
data point.

This means that businesses can look at data and see patterns across time and
space, rather than a mass of figures and numbers that aren’t meaningful to the
core function of the organization.

3. Forecasting Data: Time series analysis can be the basis to forecast data.
Time series analysis is inherently equipped to uncover patterns in data which
form the base to predict future data points. It is this forecasting aspect of
time series analysis that makes it extremely popular in the business area.
Where most data analytics use past data to retroactively gain insights, time
series analysis helps predict the future. It is this very edge that helps
management make better business decisions.
DISADVANTAGES OF TIME SERIES ANALYSIS

Time series analysis is not perfect. It can suffer from generalization from a
single study where more data points and models were warranted. Human error
could misidentify the correct data model, which can have a snowballing effect
on the output.

It could also be difficult to obtain the appropriate data points. A major point of
difference between time-series analysis and most other statistical problems is
that in a time series, observations are not always independent.

For example, a single chance event may affect all later data points, and it is up
to every data scientist to accurately gauge which of these events may have an
impact on the analysis in question. Are there similarities in predictions that can
make historical data useful?

FUTURE OF TIME SERIES ANALYSIS

Time series analysis represents a highly advanced area of data analysis. It

focuses on describing, processing, and forecasting time series. Time series are
time-ordered data sets. When interpreting a time series, autocorrelation patterns,
seasonality, and stationarity must be taken into account before selecting the
right model for analysis. There are several time series analysis models, ranging
from basic, fine-tuned, and advanced. Advanced models help data analysts to
predict time series behavior with much greater accuracy.

With the advent of automation and machine learning techniques,

comprehending this information and conducting complex calculations is not as
tough as it once was, paving the way for a better understanding of our past, and
our future.