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Finding Seasonal
Trends in Time-Series
Data with Python
A guide to understanding the different
kinds of seasonality and how to
decompose the time series into trends and
seasons
Spencer Hayes · Follow
Published in Towards Data Science
5 min read · Jun 7, 2021
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Photo by Craig Adderley from Pexels
Why Explore Seasonality?
Seasonality in time-series data refers to a
pattern that occurs at a regular interval.
This is different from regular cyclic trends,
such as the rise and fall of stock prices,
that re-occur regularly but don’t have a
fixed period. There’s a lot of insight to be
gained from understanding seasonality
patterns in your data and you can even use
it as a baseline to compare your time-series
machine learning models.
Getting Started
Quick note: For this article, I’ll be using data
published by the Quebec Professional
Association of Real Estate Brokers. The
association publishes monthly real estate stats.
For convenience, I’ve put the monthly median
condo prices for the Province of Quebec and
the Montreal Metropolitan Area into a CSV
file, available here:
https://drive.google.com/file/d/1SMrkZPAa0a
Al-ZhnHLLFbmdgYmtXgpAb/view?
usp=sharing
The quickest way to get an idea of whether
or not your data has a seasonal trend is by
plotting it. Let’s see what we get when we
plot the median house price in Montreal by
month.
Image by author
A keen eye might already see from this plot
that the prices seem to dip around the new
year and peak a few months before, around
late summer. Let’s dive a little further into
this by plotting a vertical line for January
of every year.
Image by author
It seems like there’s definitely a trend here.
In this case, it appears the seasonality has a
period of one year. Next, we’ll look into a
tool we can use to further examine the
seasonality and break down our time series
into its trend, seasonal, and residual
components. Before we can do that
though, you’ll have to understand the
difference between an additive and a
multiplicative seasonality.
Additive vs Multiplicative Seasonality
There are two types of seasonality that you
may come across when analyzing time-
series data. To understand the difference
between them let’s look at a standard time
series with perfect seasonality, a cosine
wave:
Sine Wave Plot — Image by author
We can clearly see that the period of the
wave is 20 and the amplitude (distance
from the centre line to the top of a crest or
to the bottom of a trough) is 1 and remains
constant.
Additive Seasonality
It’s pretty rare for actual time series to have
constant crest and trough values and
instead, we typically see some kind of
general trend like an increase or a
decrease over time. In our sales price plot,
for example, the median price tends to go
up over time.
If the amplitude of our seasonality tends to
remain the same, then we have what’s
called an additive seasonality. Below is an
example of an additive seasonality.
Additive seasonality — Image by author
A great way to think about it is by
imagining we took our standard cosine
wave and simply added a trend to it:
Image by author
We can even think of our basic cosine
model from earlier as an additive model
with a constant trend! We can model
additive time series using the following
simple equation:
Y[t] = T[t] + S[t] + e[t]
Y[t]: Our time-series function
T[t]: Trend (general tendency to move up
or down)
S[t]: Seasonality (cyclic pattern occurring
at regular intervals)
e[t]: Residual (random noise in the data
that isn’t accounted for in the trend or
seasonality
Multiplicative Seasonality
The other type of seasonality that you may
encounter in your time-series data is
multiplicative. In this type, the amplitude
of our seasonality becomes larger or
smaller based on the trend. An example of
multiplicative seasonality is given below.
Multiplicative seasonality — Image by author
We can apply a similar train of thought as
we used with our additive model and
imagine that we took our cosine wave but
instead of adding the trend, we multiplied
it (hence the name multiplicative
seasonality):
Multiplicative seasonality — Image by author
We can model this with a similar equation
as our additive model by just swapping the
additions for multiplications.
Y[t] = T[t] *S[t] *e[t]
Decomposing the dataset
Now that we have a clear picture of the
different models, let’s look at how we can
break down our real estate time series into
its trend, seasonality, and residual
components. We’ll be using the
seasonal_decompose model from the
statsmodels library.
The seasonal_decompose model requires
you to select a model type for the
seasonality (additive or multiplicative).
We’ll select a multiplicative model since it
would appear the amplitude of the cycles is
increasing with time. This would make
sense since a large factor for housing
prices is lending rates which are done as a
percentage of the price.
Image by author
Ta-da! The trend, seasonal, and residual
components are returned as Pandas series
so you can plot them by calling their plot()
methods or perform further analysis on
them. One thing that may be useful is
measuring their correlation to outside
factors. For example, you could measure
the correlation between the trend and
mortgage rates or you could see if there’s a
strong correlation between the residual
and the number of new babies born in the
city.
Conclusion
From our decomposition, we can see the
model picked up on a 5% difference
between the seasons. If you’re looking to
sell your house, you should probably list it
in mid to late spring instead of mid-winter
if you want to get top dollar!
295 7
Time Series Analysis Data Science
Data Visualization Data Analysis
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Written by Spencer Hayes
76 Followers · Writer for Towards Data Science
Data Scientist — Leav (https://www.leav.co/) Passionate
about computer vision, NLP, and classic ML.
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