Understanding Seasonality in Time-Series Analysis

Easy Time-series Analysis Seasonality

In time-series analysis, seasonality refers to periodic fluctuations that occur at regular intervals. These fluctuations can impact forecasting models and decision-making processes. Suppose a retail store experiences monthly sales data that demonstrates a consistent increase during the holiday season (November and December) and a decline in sales during the summer months (June to August).

From the given options below, which statement best describes a characteristic of seasonality in this context?

Seasonality can affect the mean and variance of sales but does not impact the direction of sales trends.

Seasonality consistently alters the sales figures in predictable ways, allowing forecasts to be adjusted accordingly.

Seasonality primarily indicates long-term trends in sales data over several years.

Hint

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