When I was a kid, I remember hearing of seasonally-adjusted economic indicators. I was rather disappointed to learn, upon growing up and taking econ, that seasonally-adjusted economic indicators were not calculated using some highly theoretical formulas taking into account all manners of variation, but were merely moving averages.
In Highlight Certain Time Periods in a Chart, I used my blog stats to illustrate how to highlight weekdays from weekends. Another way to account for cyclical variations is to take a moving average. I’ll use the same data here to show two ways to construct moving averages. A moving average simply moves along the data, taking the average at each point of the previous N values.
[Read more…] about Moving Averages
