Module 3 - Visualization Techniques

bar plot

• chart used to compare values of a small number of observations

• x-axis represents the observations and the y-axis represents their values characterized by the height of the bars

comovement

• characterizes the observed relationship between two series

• positive means that the two series are moving in the same direction on average (they go up and down together)

• negative means that the two series move in opposite directions (when one series goes up, the other goes down)

• only characterizes observed relationships

• existence does not imply that an actual relationship exists

histogram

• particular bar chart used to illustrate the distribution of a series

• range of the series is divided into intervals

• height of the bars corresponds to the number of observations included in each interval

line chart

• shows the evolution of a series through time

• x-axis represents time and y-axis represents value of the observations

• points are connected by lines

relationship

• characterizes the link between two variables

• exists if an underlined mechanism links the two variables

• is direct if one variable is causing the other

• is indirect if one variable is causing the other through a third variable

scatter plot

• used to illustrate comovements between two series

• x-axis represents the values of one series and the y-axis represents the values of another series

• points are not usually connected by line

short term fluctiations

• the behaviour of a series over shorter period of time

• shorter = shorter than the period spanned by our dataset

• defined as the movement of a series over a few months, few quarter or few years

trending behaviour

• the behaviour of a series on average over a long period of time

• long period = the period spanned by our dataset

• positive trend = series is increasing on average over the period

• negative trend = series is decreasing on average over the period

volatility

• the intensity of the short term fluctuations

• if two series have the same measurement units and same scale, the one that fluctuates with higher ups and lower downs is more ____ than the other

• cannot compare two series with different measurement units and different scale