Time series forecasting

Understanding Data Science

Lis Sulmont

Curriculum Manager

Modeling in data science

What is a statistical model?

  • Represent a real-world process with statistics
  • Mathematical relationships between variables, including random variables
  • Based on statistical assumptions and historical data
Understanding Data Science

Predictive modeling

Predictive model

  • Enter new input(s) and model predicts an outcome
Understanding Data Science

Predictive modeling

Predictive model

  • Enter new input(s) and model predicts an outcome
Understanding Data Science

Predictive modeling

Predictive model

  • Enter new input(s) and model predicts an outcome
    • Probability of an outcome
Understanding Data Science

Predictive modeling

Predictive model

  • Enter new input(s) and model predicts an outcome
    • Probability of an outcome
  • Ranges in complexity, from a linear equation to a deep learning algorithm
Understanding Data Science

Time series data

A series of data points sequenced by time

  • Stock prices
  • Gas prices
  • Unemployment rates
  • Heart rate
  • CO2 levels
  • Height of ocean tides

Time series icon

Understanding Data Science

Plotting time series data

Canadian unemployment rates

Date Rate
1976-01-01 7.1
1976-02-01 7
...
1991-01-01 10.3
...
2015-04-01 6.8
2015-05-01 6.8
Understanding Data Science

Seasonality in time series

Weather time series

Understanding Data Science

Seasonality in time series

Weather time series

Understanding Data Science

Forecasting time series

  • Examples:
    • How much rainfall will we get next month?
    • Will traffic ease up in the next half hour?
    • How will the stock market move in the next six hours?
    • What will be earth's population in 20 years?
  • Derive a model from historical data to generate predictions
  • Modeling methods use a combination of statistical and machine learning methods
Understanding Data Science

Pea Prices in Rwanda

Understanding Data Science

Forecasted Pea Prices

$$

Confidence intervals

Model is X% sure that the true value will fall in this area

Understanding Data Science

Let's practice!

Understanding Data Science

Preparing Video For Download...