endent, variable. The statistical concepts of both regression and correlation are valuable tools. Regression coefficients permit the projection of movements in one variable based on movement in another variable or in a set of other variables. Correlation coefficients establish both the strength of relationships between variables, and the nature of such relationships positive or negative. What a simple correlation coefficient does not do, however, is to establish a causal relationship between the variables. The simple regression formula is y = a + bx. In this equation, y is the dependent variable value for a time period, a is the estimated variable value for time zero (the constant), b is the change in the variable value per time unit, and x is the time unit.
The moving average projection generates a forecast for the next time period by averaging the relevant data values for
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