Have you ever stared at a time series chart, wondering whether a sudden jump or shift is meaningful or just noise? TractionRoad's free Breakpoint Dete

How to Detect Real Changes in Time Series

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2024-10-14 16:30:08

Have you ever stared at a time series chart, wondering whether a sudden jump or shift is meaningful or just noise? TractionRoad's free Breakpoint Detection Tool helps you decide whether a change in your data is statistically significant or not.

But how does it work? And what are the limitations of the tool? This article explains the statistical background of the tool and how to use it to detect breakpoints in your data.

Breakpoints are sudden changes in your data that happen because of a change in the underlying process generating the data. For example, an increase in sales could be due to a new marketing campaign or a change in customer behavior.

In the chart above the breakpoint is a sudden jump of searches around January 1st. People are making new year's resolutions and are suddenly searching for gym memberships. Throughout the year the search volume drops again.

However, some fluctuations look like changes but are just noise. These are random fluctuations that don't reflect any real change in the underlying process.