Time Series • Introduction to Time Series
Time Series / Meaning and Definition of Time Series

Meaning and Definition of Time Series

Notes 1 Introduction to Time Series

A time series consists of observations of a variable collected sequentially over time. The time order of observations is important because the purpose is to study how the variable behaves and changes over time.

Notes

Meaning and Definition of Time Series

Definition

A time series consists of observations of a variable collected sequentially over time. The time order of observations is important because the purpose is to study how the variable behaves and changes over time.

In Simple Words

A time series is a set of values written in the order of time, so that we can see how a variable moves from the past to the present.

Examples

  • Daily temperature
  • Monthly sales
  • Yearly population
  • Quarterly profit

Importance of Chronological Order

Time-series observations are chronological. Their original time order must be preserved during analysis. If the order is changed, the true pattern of the series is lost and any later forecast may become misleading.

Example

Monthly sales must be kept as January, February, March, and so on. Mixing these months would hide the actual movement of sales over time.