Time and trends
Moving average
The average of the last few values in a time series, recalculated as each new value arrives.
- Time and trends
Definition
The average of the last few values in a time series, recalculated as each new value arrives. It smooths out short-term noise so the direction is easier to see.
Also called
Rolling average
Example
Skye Ascent's launches were 2, 3 and 4 in 2023 to 2025. The three-year moving average for 2025 is 3 launches a year.
Skye Ascent Ltd is a fictional company created for Insyt.
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Why it matters
It smooths out noise so the real trend is easier to see.
Where it is used
Trend charts, stock prices and demand forecasts.
How to calculate it
Sum of values for the last n days ÷ n
Worked example
Sales of 90, 110 and 100 over the last three days give a 3-day moving average of 100.