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Had he stopped there I might have concluded it was just a poor explanation. But luckily he continued: Put another way, we've introduced a mutual dependency. B
by nkurz 12y ago
Had he stopped there I might have concluded it was just a poor explanation. But luckily he continued:
Put another way, we've introduced a mutual dependency. By introducing a trend, we've made Y1 dependent on X, and Y2 dependent on X as well. In a time series, X is time. Correlating Y1 and Y2 will uncover their mutual dependence — but the correlation is really just the fact that they're both dependent on X. In many cases, as with Jennifer Lawrence’s popularity and the stock market index, what you’re really seeing is that they both increased over time in the period you’re looking at.
What, pray tell, is the X for which the stock market index and Jennifer Lawrence's popularity depend on? Oh, you say they're both dependent on the underlying trend... What?
- nemo44x 12y agoThat's right. Sort of like factoring out common variables/values in algebra I'd say. Time series is the "easy case" but I suspect identifying less obvious commons is the real art of it all.