Time Series Forecasting
(Time Series Analysis)
Week-1
Proprietary content. ©Great Learning. All Rights Reserved.
Unauthorized use or distribution prohibited.
DSBA Curriculum Design
Foundations Core Courses Domain Applications
• Data Science Using • Advanced Statistics • Financial Risk Analytics
Python • Data Mining • Marketing Retail Analytics
• Statistical Methods for • Predictive Modelling
Decision Making • Machine Learning
• Time Series Forecasting
• Data Visualization
• SQL
Proprietary content. ©Great Learning. All Rights Reserved.
Unauthorized use or distribution prohibited.
LEARNING OBJECTIVE
OF THIS SESSION
• Time Series and its components
• Decomposition of Time Series
Proprietary content. ©Great Learning. All Rights Reserved.
Unauthorized use or distribution prohibited.
TRY ANSWERING THE FOLLOWING
● If the Time Series data has missing
values, we are allowed to drop those
data points from our analysis. – True or
False? Discuss.
● The residuals in a decomposition of a
Time Series give us the idiosyncratic
part of the series which is not picked
up by the Trend and Seasonality. –
True or False?
Proprietary content. ©Great Learning. All Rights Reserved.
Unauthorized use or distribution prohibited.
Time Series and its 3 Components
An ordered sequence of values of a variable at equally
spaced time intervals. Time series various examples
are as follows:
trend
seasonality
residual
Proprietary content. ©Great Learning. All Rights Reserved.
Unauthorized use or distribution prohibited.
Time Series Decomposition
• Decomposition procedures are used in time
series to describe the trend and seasonal
factors in a time series. Additive(Xt): Multiplicative(Xt):
• One of the main objectives for = Trend + Seasonal + Random = Trend * Seasonal * Random
decomposition is to estimate seasonal effects
that can be used to create and present
seasonally adjusted values.
• A seasonally adjusted value removes the
seasonal effect from a value so that trends
can be seen more clearly.
• The additive model is useful when the
seasonal variation is relatively constant over
time.
• The multiplicative model is useful when the
seasonal variation increases over time.
Proprietary content. ©Great Learning. All Rights Reserved.
Unauthorized use or distribution prohibited.
Industry Application – Predicting Stock Prices
• Time Series Forecasting procedures are used to predict stock prices or sales. Till now we have seen how the
predict sales using cross-sectional data but not Time Series.
• The following is the stock price data of Tesla from the year 2017. Sophisticated Time Series Forecasting
models are used to predict stock prices.* We can also attempt to describe this particular Time Series using
the methods learned in this week’s video lectures.
Proprietary content. ©Great Learning. All Rights Reserved.
Unauthorized use or distribution prohibited.
Case Study - Analysing Beer Production in Australia
“Prediction is difficult, especially about the future.”
Keeping the above statement in mind, we will analyze the data and try to understand the
production of Beer across various years in Australia. We will use descriptive statistics
measures to do so. We will also do a plot of the Time Series, decompose the Time Series data
and try to understand how beer production has changed over the past years.
Proprietary content. ©Great Learning. All Rights Reserved.
Unauthorized use or distribution prohibited.
ANY QUESTIONS
Proprietary content. ©Great Learning. All Rights Reserved.
Unauthorized use or distribution prohibited.
DATA SCIENCE @ work
Apply Data Science at your workplace to gain some instant benefits:
• Get noticed by your management with your outstanding analysis backed by data
science.
• Create an impact in your organization by taking up small projects/initiatives to solve
critical issues using data science.
• Network with members from the data science vertical of your organization and seek
opportunities to contribute in small projects.
• Share your success stories with us and the world to position yourself as a subject matter expert
in data science.
Proprietary content. ©Great Learning. All Rights Reserved.
Unauthorized use or distribution prohibited.
