Lesson 6: Measuring Forecast Error
September 10, 2020
Review:
- Time Series Forecasting
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 Oil Prices
- Compare to Actual Oil Prices
Activity:
- Calculate MAD and RMSE
- Compare your forecasts for Treasury Rates from Lesson 5 to actual rates.
Assignment:
- No assignment due this week.
- Use the time to get caught up or get ahead in this or other classes.
- We will begin Multiple Regression next week