TIME SERIES ANALYSIS AND FORECASTING OF LARGE CAP MUTUAL FUNDS.

Time Series Analysis and Forecasting.Whether we wish to predict the trend in financial markets or electricity consumption, time is an important factor that must now be considered in our models. For example, it would be interesting to forecast at what hour during the day is there going to be a peak consumption in electricity, such as to adjust the price or the production of electricity.Time series. A time series is simply a series of data points ordered in time. In a time series, time is often the independent variable and the goal is usually to make a forecast for the future.

STATIONARY

Stationarity is an important characteristic of time series. A time series is said to be stationary if its statistical properties do not change over time. In other words, it has constant mean and variance, and covariance is independent of time.Often, stock prices are not a stationary process, since we might see a growing trend, or its volatility might increase over time.

SEASONALITY

Seasonality refers to periodic fluctuations. For example, electricity consumption is high during the day and low during night, or online sales increase during Christmas before slowing down again.

AUTOCORRELATION

Informally, autocorrelation is the similarity between observations as a function of the time lag between them.