R Data Analysis Cookbook, Second Edition - Second Edition

How to do it...

To apply the HoltWinters method for exponential smoothing and forecasting, follow these steps:

1. Read the data. The file has monthly stock prices from Yahoo! Finance for Infosys between March 1999 and January 2015:

> infy <- read.csv("infy-monthly.csv") 

2. Create the time series object:

> infy.ts <- ts(infy$Adj.Close, start = c(1999,3),     frequency = 12) 

3. Perform Holt-Winters exponential smoothing:

> infy.hw <- HoltWinters(infy.ts)

4. Plot the results:

> plot(infy.hw, col = "blue", col.predicted = "red") 

The plotted result can be seen as follows:

5. Examine the results:

> # See the squared errors > infy.hw$SSE [1] 1446.232 > ...