David, first of all thank you for taking time in writing this wonderful explanation. It does help a lot!
The motive behind using the expression "make my analysis more perfect" can be better explained in the following example.. Let's consider a weekly volume trend and just as an example let's assume that the volumes trends down every alternate week.... Now if we see the predictive model, for the coming weeks the volume should trend the same way i.e downward every alternate week.. However its showing the other way round,which is possible but not 100% accurate. Krishnan Sent on my BlackBerry® from Vodafone -----Original Message----- From: David Grugeon <da...@grugeon.com.au> Sender: excel-macros@googlegroups.com Date: Wed, 26 Sep 2012 09:34:10 To: <excel-macros@googlegroups.com> Reply-To: excel-macros@googlegroups.com Subject: Re: $$Excel-Macros$$ Formulas for predictive analysis and forecasting This is not my area of expertise but I will give you a few pointers. There are probably statisticians in the group who can improve, or may disagree with what I am saying. It depends what you are predicting. You need to understand the data and the theatre in which you are observing them. If possible you need to understand what the drivers are and model the impact the drivers have on the output. Sometimes you are dealing with a complex system such as a perfect market which has a substantial quantity of independent and , in themselves unpredictable, drivers. Stock and currency markets are good examples of such a theatre. In this case there may be some characteristic patterns which are the result, not of the external drivers, but of the behaviour of the players (human or computer) in the market. These can be observed and modelled but random events can result in different activity. There are many books about this and some people claim to make money using purely charts and ignoring the fundamentals. Other statistical predictions such as life expectancy, business profits, etc are more closely associated with the relevant drivers and a modelling approach may be more useful than a purely statistical approach. You are using linefitting which assumes a linear trend.It may be appropriate but your data may be trending more closely to a non-lineal curve. For example inflation has over the long term remained at around 3.5%. While this can be shown by a straight line on a chart of year-on-year inflation rates, plotting prices results in an exponential curve. To calculate and predict this you either model the rate of change and incorporate this into output(price) calculations or you use a function such as Logest on the price data. You use the expression "make my analysis more perfect". I would say that there are very few situations in real life when a statistical prediction can be perfect. The best you can expect is that you will get nearer to predicting actual outcomes. If you do a search on Google for "Excel statistical predictions" you will find there are also many more advanced statistical packages which can be used with excel. The drawback is that most of them cost $$. Sorry - a lot of waffle - hope it helps. Regards David Grugeon On 26 September 2012 03:09, <krishnanm2...@gmail.com> wrote: > Dear Excel Gurus ! Hope you guys are doing well... I required some formulas/ > functions that can be used for predictive/ forecasting models... Currently I > am using slope (linest) and intercept.. But require another formula which can > make my analysis more perfect... Thanks in advance ! > > Krishnan > Sent on my BlackBerry® from Vodafone > > -- > Join official facebook page of this forum @ > https://www.facebook.com/discussexcel > > FORUM RULES (1120+ members already BANNED for violation) > > 1) Use concise, accurate thread titles. 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