Lesson 6: Measuring Forecast Error
January 30, 2019
Review:
- Time Series Forecasting
- Exam 1 next week
Presentation:
- Forecast Error
- MAD – mean absolute deviation
- MAD = ∑|Actual – Forecast|/(Number of Forecasts)
- RMSE – root mean square error
- RMSE = √(∑(Actual – Forecast)^2/(Number of Forecasts))
- Scatterplot comparison – actual vs forecast
- Residual analysis
- Outliers
- MAD – mean absolute deviation
- Demonstrate with S&P 500 data
Activity: