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Components of Time Series

This is Lecture series on Time Series Analysis Chapter of Statistics by Prof. Vinod Kumar. In this part, you will learn the components of time series. There are 4 components:

1. Secular Trend

Secular trend is basic tendency to grow or decline over a period of time. Its other name is trend or long term trend. In this trend, we ignore short term fluctuations but we see the tendency of data in long period like 5 or any other long period.

2. Seasonal Variation

It is the seasonal up and down movement of data due to changing of season within one year. If there is the season of winter, you will buy the woolen clothes. So, the trend of increasing the sales of woolen clothes in winter.

3. Cyclical Variation

It is the up and down movement of data which is more than one year. It happens due to business cycle.

4. Random Variation

It is the up and down movement of data without any trend. It is the mix trend of above variations. It also happens due to accidents or natural mis-happenings.

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