TRENDS IN TIME SERIES AHHH!

[horizon]

I really don't get how to tell them apart.

Whats the difference between secular, seasonal, cyclical and random trends? Is there a trick to differentiate between them?

Is it only me, or do they all pretty much look the same?  :buck2:

[Predator]

I have not heard of secular so can not comment there.
Seasonal means that it is up and down the same time every year.
Cyclical means that it is up and down but it is not in the same year but the same period.
Random is pretty much always present but generally means when it doesn't appear to be the same.
Remember to say increasing or decreasing and use examples such as the months it occurs.

[tarek]

I have not heard of secular so can not comment there.
Seasonal means that it is up and down the same time every year.
Cyclical means that it is up and down but it is not in the same year but the same period.
Random is pretty much always present but generally means when it doesn't appear to be the same.
Remember to say increasing or decreasing and use examples such as the months it occurs.

+1 I've never heard of secular?

[_avO]

Qualitative analysis of time series:
(1) Trend pattern-increase or decrease in the data over time.
(2) Seasonal pattern-variation of the data due to seasonal factors, e.g. the month of the year, the day of the week or the hour of the day.
(3) Cyclic pattern-longer term (years) fluctuations in the data.
(4) Random pattern-unpredictable short term variations of the data about a constant value.

How to distinguish seasonal from cyclic pattern: Seasonal pattern has a constant length in the cycle and constant magnitude in the variation. Cyclic pattern has a changing cycle length and magnitude from cycle to cycle. Seasonal pattern exists in many time series. To study long term trends, remove the seasonal effects from the data, the process in doing so is called deseasonalising the data and the resulting figures are called seasonally adjusted figures. The estimates of seasonal effects are called seasonal indices.

[ruchika5]

Secular is the same as the trend pattern.

[tryingtobeoptimistic]

I'm getting all confused over the trends too! They do look very similar, particularly the random and cyclic trend.  

[_avO]

I guess the main difference between the two is for Cyclic you can predict what direction the trend is going (i.e. if you were to fit a line that best describes the data is the gradient positive or negative?) whereas with a random trend you can't guess the gradient and get it right every time

[francis8nho]

Seasonal is within a year. Every 3 months, 6 months etc...  Eg: Mangos are seasonal.

Cyclical is a peak that occurs when it is more than a year. Usually every 2 year, 5 years or 10 years.

Random means they cannot be counted like seasonal peaks. Eg: A war would be considered random.

Secular is usually used to describe an upward trend or downward trend.

[_avO]

This confused me a lot last year and I still don't know the exact definition of either however this is what I think it is

My opinion is that Seasonal trends are predictable in terms of what direction it is going and when you can expect fluctuations to occur. (can be every month, 3 months, year, 5 years etc.)
For example every December you'd expect that sales in Toys would fluctuate and fall in January and then this would repeat itself every year however income is also rising so generally there would be a longterm increasing trend.

Whereas with a Cyclical trend you can predict the direction in which it is going however you can't predict exactly when fluctuations will occur i.e. the pattern varies in time length or magnitude from cycle to cycle
Eg. Economic growth

[Shannon101]

Hi Guys

There seemed to be a fair bit of confusion around this with my tutoring students, and when I saw this thread as well I thought it might be worthwhile recording one of my tutorials on this topic. So... voila - this is how I would explain telling the difference between them all.
Tutorial on Patterns and Trends in Time Series Plots

Hope that helps a bit!

:-)
Shannon