Whenever and wherever data is collected, time becomes a crucial factor. This is because the information you gather is time-bound — it becomes useless if not acted upon at the right time. Data must be analyzed for it to be useful, and timing should be considered in that analysis.
Time series analysis is one of the most powerful data analysis methods. It gives accurate results, explaining why it has found applications in many industries. Learn more about how you can use this technology.
The Benefits of Time Series Analysis
1. Cleaning Data
If you are given time serie data, you can analyze it to identify true “signals” by eliminating “noise” in the data. In other words, time series will help you to remove outliers. It can also help you understand what the information means when you apply various averages. In fact, data cleaning is a crucial step in all analysis processes.
2. Understanding Data
Raw data can be misconstrued and misunderstood, even if you are an expert. Time series analysis is a very powerful tool to help with understanding data. All these analysis models help find more accurate data interpretation, which brings out the true meaning of a set of data.
3. Data Forecasting
Forecasting is perhaps the most important benefit of time series. This analysis can be used to discover patterns and trends in data that you can use to predict future important points. For instance, you can use seasonality measures and auto-correlation measures to predict specific data points. Additionally, you can use stationarity measures to estimate future values.
1. The Business and Financial Domains
Businesses make investment and financial decisions based on predicted demands and expected future changes. Time series data can be analyzed to help forecast essential processes that explain the dynamics of financial markets and other investment options. By examining the available data, a financial expert can forecast various financial applications in various areas, including:
- Portfolio construction
- Options trading and pricing
- Risk evolution
For example, you can use analyzed information to predict stock market volatility, risks in foreign currency, interest rates, etc. The forecast can help you decide on resource allocation, market stability, purchases, and production.
2. Medical Domain
The medical field has developed rapidly over the years. Today, nearly all operations in this field are data-driven. This is where this unique form of analysis comes in. For example, figures are used to study how patients progress over a period.
Some medical conditions require that medics examine how the physiological characteristics of their patients transform. For example, for doctors to diagnose how the heart rate varies with the respiration rate recorded on sensors, they may have to connect case-based monitoring with time series.
3. Medical Instruments
Time series analysis has found use in medical diagnosis by analyzing information obtained from medical instruments such as electrocardiograms (ECGs) and electroencephalograms (EEG). The former is used in diagnosing heart problems by recording the heart’s electrical pulses, while the latter is used to measure electrical impulses/activities in the brain.
Astronomy is a modern and contemporary application of time series. Astronomy relies heavily on data as it involves accurate measurements and plotting trajectories and objects. Astronomical experts use time series to calibrate their instruments to study the objects they are interested in.
Implementing Time Series Applications
The benefits and applications of time series analysis discussed above are by no means exhaustive. A lot of research is still ongoing to find more applications in many other industries. If you’re looking for a better way to understand the information at your fingertips, you could be at the forefront of introducing this technology to your business.
Learn more about how time series analysis could help in your endeavors.