Question
When decomposing time series data, which component is
primarily targeted to be removed to focus on the longer-term trend?Solution
In time series decomposition, seasonality is often removed to observe the underlying trend, as it allows analysts to analyze the data without the cyclical variations. By isolating seasonality, we can better understand the long-term trend, which reflects the general direction of the data over time. Decomposition methods, like seasonal adjustment, are crucial when the goal is to highlight the trend in time series data for clearer forecasting. Option A (Noise) is incorrect because noise is random and doesn’t follow a regular pattern; it’s often filtered out rather than decomposed. Option C (Irregular Component) is incorrect as irregular components are random and not part of systematic decomposition. Option D (Trend) is incorrect because the trend is typically retained when seasonality is removed. Option E (Stationarity) is incorrect because stationarity is a characteristic of the series rather than a decomposable component.
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