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| Topic: |
Business
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| Number of pages / Number of words: |
5 / 1212 |
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Irregular Component/Random fluctuations
The irregular component is that left over when the other components of the series (trend, seasonal and cyclical) have been accounted for.
It is caused by unusual occurrences that produces movements that are not clearly defined or do not follow any pattern (dissimilar)...
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They provide a clearer view of the true underlying behavior of the series.
In some time series, seasonal variation is so strong it obscures any trends or cycles which are very important for the understanding of the process being observed. Smoothing can remove seasonality and makes long term fluctuations in the series stand out more clearly...
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