Extrapolative statistical models

Extrapolative statistical models

Models that apply a formula to historical data and project results for a future period. Such models include the simple linear trend model, the simple exponential model, and the simple autoregressive model.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Extrapolative Statistical Model

Any model that attempts to use past trends in data in order to predict future trends. This may be used in any number of business or non-business situations. However, technical analysts commonly use extrapolative statistical models in order to predict future prices of securities. This can be quite important in the futures and option markets.
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