Time Series • Time Series Analysis and Components
Time Series / Trend

Trend

Notes 2 Time Series Analysis and Components

Trend represents the long-term general direction of a time series. It may show a long-term increase, decrease, or relatively stable movement.

Notes

Trend

Definition

Trend represents the long-term general direction of a time series. It may show a long-term increase, decrease, or relatively stable movement.

Example

A company's sales increasing gradually over several years indicate an upward trend.

Types of Trend

Upward Trend

The series shows a long-term increase. Values tend to rise as time passes, even if there are small short-term ups and downs.

Downward Trend

The series shows a long-term decrease. Values tend to fall over a long period.

Relatively Stable Trend

The series does not show a clear long-term rise or fall. The general level remains roughly the same over time.

Exam Note

Unit 1 is concerned with the meaning of trend. Methods of estimating trend belong to later syllabus areas.