Answer to Question #250758 in Statistics and Probability for Ankit

Question

What is secular trend? Using suitable examples, highlight its significance in a time series. Hiw is centred moving average determined while finding trend values?

Answer 1

Solution:

Secular trend – The word trend means 'tendency'. So, secular trend is that component of the time series which gives the general tendency of the data for a long period.

The steady growth of the same status for a particular commodity of a company or the fall of demand for a certain article for long years can be studied through secular trend. Do note that rapid fluctuations cannot give the trend.

Growth of population in a locality over decades is a good example of secular trend.

By default, moving average values are placed at the period in which they are calculated. For example, for a moving average length of 3, the first numeric moving average value is placed at period 3, the next at period 4, and so on.

When you center the moving averages, they are placed at the center of the range rather than the end of it. This is done to position the moving average values at their central positions in time.