What is the main assumption of the ratio-to-moving-averages method?
The seasonal component is additive.
The ratio-to-moving-averages method assumes that the seasonal component is additive, meaning that the seasonal effects are added to the trend component to generate the time series data. This assumption is crucial when decomposing time series data into its components.
Let X be a real-valued random variable with E[X] and E[X2] denoting the mean values of X and X2, respectively. The relation which always holds is
Two continuous random variables X and Y are related as
Y = 2X + 3
Let \(\sigma_X^2\) and \(\sigma_Y^2\) denote the variances of X and Y, respectively. The variances are related as