What are the Different Types of Trend Lines?
Discover all you need to know about trend lines. What they are, how many there are and which one to choose based on your data.
Trend lines. What are they? How many are there? Which one should you choose?
What is a Trend Line?
Trend lines are distinctive lines that are drawn on charts to link a sequence of numerical data or demonstrate the best fit for specific data. Trend lines provide a solid indication of the potential direction of movement.
TIP: Trend lines show which single line or curve fits some data the best. To better illustrate the trend in a chart, a single trendline might be used.
What are the Trend Lines?
- Moving average.
You can pick from any of the six usual trend/regression types when you want to add a trend line to a chart. Your choice of trend line depends on the kind of data you have.
TIP: When a trend line's R-squared value is at or close to 1, it is at its most reliable. Most BI and statistical tools will automatically calculate the R-Squared value.
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Trend Lines Explained
A best-fit straight line for basic linear data sets is a linear trendline. If the arrangement of your data points resembles a line, then your data is linear. A linear trendline often depicts a consistent increase or decrease in a variable.
A logarithmic trendline is the best-fit curved line and is particularly helpful when the data's rate of change rises or falls sharply before levelling off. The values used in a logarithmic trendline may be negative or positive.
When data fluctuates, a polynomial trendline is a curved line that is employed. For instance, it is helpful when examining gains and losses across a huge data collection. The amount of data fluctuations or the number of bends (hills and valleys) on the curve can both be used to determine the order of the polynomial. Typically, there is only one hill or valley on an Order 2 polynomial trendline. Typically, Order 3 contains one or two hills or valleys. Order 4 typically has three or more.
A power trendline is a curving line that works well when compared to data sets that compare measures that rise at a particular pace, such as a race car's acceleration at one-second intervals. If your data contains zero or negative values, you cannot generate a power trendline.
A curving line known as an exponential trendline is particularly helpful when data values increase or decrease at progressively faster rates. If your data contains zero or negative values, you cannot generate an exponential trendline.
A moving average trendline smoothes out data volatility to more clearly display a pattern or trend. A moving average trendline averages a predetermined quantity of data points (determined by the Period option), uses the result as a point in the trendline. The average of the first two data points is utilised as the first point in the moving average trendline, for instance, if Period is set to 2. The second point on the trendline is the average of the second and third data points, and so forth.