Hi,
I ran automatic ARIMA test on our daily sales data which gave the best model. I tried doing forecasting based on the best model but the standard errors were too large. So, I changed the dependent variables from DLOG(Daily_Units_Sold) to just 'Daily_units_Sold' and the standard errors became normal. Is it because of the log differentiation that it caused the standard errors to inflate so much? If so, then is there a way to normalize the standard errors?
Thank you,
Shehram Sikander
Automatic ARIMA Forecasting
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Re: Automatic ARIMA Forecasting
In one case you are predicting the first difference and in the other you are predicting the level.
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Re: Automatic ARIMA Forecasting
I agree. However, does taking the dlog of the dependent variable affects the variance so much to the point that it is almost impossible to see the dependent variable in a normal graph. Should I instead go with other top 20 models mentioned in the automatic ARIMA output?
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