What are ACF and PACF plots used for?
ACF (Autocorrelation Function) plots show the correlation between a time series and its lagged versions. PACF (Partial Autocorrelation Function) shows the direct correlation at each lag after removing indirect effects. Together, ACF and PACF help identify the appropriate p and q parameters for ARIMA models โ spikes in ACF suggest MA components; spikes in PACF suggest AR components.
What is the difference between ARIMA and SARIMA?
ARIMA handles non-seasonal time series. SARIMA (Seasonal ARIMA) extends ARIMA to handle seasonal patterns by adding seasonal AR, I, and MA components with parameters (P,D,Q) for the seasonal cycle length (s). For example, SARIMA(1,1,1)(1,1,1)[12] models monthly data with annual seasonality.
What tools are used for time series analysis?
Popular tools include: Python (statsmodels, Prophet, scikit-learn, pandas), R (forecast, tseries, fable packages), MATLAB, SAS, and specialized platforms like AWS Forecast and Azure Time Series Insights. Prophet (by Meta) is popular for business forecasting due to its automatic handling of holidays and seasonality without requiring deep statistical knowledge.