Time Series • Time Series Analysis and Components

Seasonal Variation

Notes 2 Time Series Analysis and Components

Quick concept

Seasonal variation refers to a pattern that repeats at a regular and known interval, such as monthly, quarterly, weekly, or yearly.

Notes

Seasonal variation refers to a pattern that repeats at a regular and known interval, such as monthly, quarterly, weekly, or yearly.

Example

Retail sales may increase every year during the festival season.

Seasonality is:

Regular — the movement appears in a systematic way
Repeating — the same type of movement occurs again and again
Associated with a known period or calendar pattern — such as weeks, months, quarters or festivals

In Simple Words

If a pattern returns at a known interval, it is seasonal. Ice-cream sales rising every summer is a seasonal movement.

Seasonal ARIMA and other advanced seasonal models are not required at this stage.