Definition
An autoregressive model is a statistical method used to predict future values based on past data. It works by using previous values of a variable to estimate what the next value might be. This model is commonly used in time-based data like stock prices or sales trends.
Example
If a stock’s price over the last few days was Rs 100, Rs 105, and Rs 110, an autoregressive model uses these past prices to predict the next value, which could be around Rs 112 or Rs 115, based on the pattern.
Caution
An autoregressive model depends only on past data, so it may not always be accurate. Sudden market changes or unexpected events can affect the results, so it should be used along with other analysis methods.