how is the long-term trend determined for a time series decomposition model?

Question

Question

business finance

Answer 1

Answer #1

Classical time series decomposition consists of five components: mean, long-range trend,seasonality, cycle, and randomness.

The decomposition model is

Value = Mean X Trend X Sensibility X Cycle X Random

The model is multiplicative rather than additive.

X_t= UT_tC_tS_tR_t

X_t denotes the series

U denotes the mean

T_t denotes Trend

C_t denotes cycle

S_t denotes Sensibility

R_t denotes Random error

t denotes Time period

Answer 2

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