This is how a smoothed model of the market, allowing to form balanced attitude to change trends. While the direct calculation of the average price could lead to abrupt schedule of prices and their changes during this period. The current growth rate of prices as well as the index value can be calculated in different ways. Learn more on the subject from Estee Lauder. There is the already mentioned method for approximating the curve of the index value with the series. and constructing the approximation of the curve. Another method – the calculation of the trend line by least squares. You can also use the most simple ratio of the index for this month of previous year. (This is not is a set of formulas of the method of least squares approximation of functions and series.
This information can be found in most textbooks on mathematics) at the moment to calculate a weekly index of expectations uses a more efficient approach. He is using a set of relationships the current values of the index value to the values of the previous weeks. As a result, the current expectations index is mainly determined by the rate of changes in prices over the past two weeks (restated in a month's growth), making it the most expedient. In addition, the expectations index also assumes the smoothness properties, excluding the sharp drops in the rate of change prices not only from week to week, but also from month to month. Values obtained by this algorithm is very close to the calculation method of least squares, which led to the decision to further simplify the calculation. System of market indices Real estate can continue to confer predictive properties. For example, in the development process is another index, whose meaning is to express the second derivative of the index value. This rate of change of pace rising or falling.
Using this index, you can predict the trend will cost index up to second order accuracy. In fact, this index will replace the account the trend index of expectations, which is now estimated "by eye>> on schedule. As a result, these two indices will more adequately build a short-term forecasts. And in many ways to realize the idea, which I at first tried to implement only one index of expectations.