In This Chapter
What's in the forecast?
Odds and ends of probability
Looking for independence
I wrote this book to show you all of Excel's statistical capabilities. My intent was to tell you about them in the context of the world of statistics, and I had a definite path in mind.
Some of the capabilities don't neatly fit along that path. I still want you to be aware of them, however, so here they are.
Here are a couple of useful techniques to help you come up with some forecasts. Although they didn't quite fit into the regression chapter, and they really didn't go into the descriptive statistics chapters, so they deserve a section of their own.
In many contexts, it makes sense to gather data over periods of time. When you do this, you have a time series.
Investors often have to base their decisions on time series — like stock prices — and the numbers in a time series typically show numerous ups and downs. A mean that takes all the peaks and valleys into account might obscure the big picture of the overall trend.
One way to smooth out the bumps and see the big picture is to calculate a moving average. This is an average calculated from the most recent scores in the time series. It moves because you keep calculating it over the time series. As you add a score to the front end, you delete one from the back end.
Suppose you have daily ...