Description:
- A series of arithmetic averages over a given number of time periods. It is the estimate of the long run average of the variable.
- Help smoothing out the data with less peaks and valley
- large grouped data point will be more smooth
Odd number of time periods MA:
- The average of any 3 data points becomes the value of the 2nd data point
Even number of time periods MA:
- Say it is n time periods
- The average of any 2n ( ex 1 to 4) data points has position 2.5
- Similarly for next 4 data points starting from i+1 (ex 2 to 5) becomes 1+2.5=3.5
- Take average of the 2 averages is the value of position 3