Reasons For Studying Seasonal Variation
There are several main reasons for studying seasonal variation:
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- The description of the seasonal effect provides a better understanding of the impact this component has upon a particular series.
- After establishing the seasonal pattern, methods can be implemented to eliminate it from the time-series to study the effect of other components such as cyclical and irregular variations. This elimination of the seasonal effect is referred to as deseasonalizing or seasonal adjustment of data.
- To project the past patterns into the future knowledge of the seasonal variations is a must for the prediction of the future trends.
Read more about this topic: Seasonality
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