moving average

Related Terms
Mean of time series data (observations equally spaced in time) from several consecutive periods. Called 'moving' because it is continually recomputed as new data becomes available, it progresses by dropping the earliest value and adding the latest value. For example, the moving average of six-month sales may be computed by taking the average of sales from January to June, then the average of sales from February to July, then of March to August, and so on. Moving averages (1) reduce the effect of temporary variations in data, (2) improve the 'fit' of data to a line (a process called 'smoothing') to show the data's trend more clearly, and (3) highlight any value above or below the trend.

Use 'moving average' in a Sentence

If you are calculating something with very high variance the best you may be able to do is figure out the moving average.
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I wanted to know what the moving average was of the data, so I would have a better understanding of how we were doing.
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When you are trying to figure out some numbers that change often the best you can do is calculate the moving average.
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