Analyzing time series is never a simple task. I wouldn’t say it’s difficult, but it is always complicated and delicate, especially when you have to manipulate time series data.
What is a Time Series?
A time series is an event that occurs over time. For example, the total daily sales of a company. The company sells products and, at the end of the day, calculates the total sales: what were the total sales for Monday, Tuesday, Wednesday, and so on. This is a time series.
Does the value of the time series — in this case, the total sales on Tuesday — influence the value of the time series on Wednesday, the following day? This is a question that someone analyzing time series will likely want to answer.
To address this question, I need to analyze the data, check the assumptions of the techniques I will adopt, consider the time factor, and often apply the concept of lag, moving the data in time at some point. In other words, it is never a simple task, but it is a high-level task, as it helps solve numerous business problems across various segments.