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Forecast and trend does not yield same result

  1. #1
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    Post Forecast and trend does not yield same result

    Hi All

    Everywhere I read about the differences between the Forecast function and the Trend function it states that these would yield the same result.

    However, I have experienced now that this is not always the case.

    In the attached I have used the forecasting function to identify future values, however, the future values have a downward slope in the forecasting, whereas by using the trend function (or just adding a trend line to the forecast graph) the future values should be increasing.

    Can anyone explain me why?
    Attached Files Attached Files

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    Re: Forecast and trend does not yield same result

    I find that using, forecast, trend, manually with linest and using the regression analysis tool all gives the same answer.


    I am uncertain as to
    =_xlfn.FORECAST.ETS(A48,$B$2:$B$47,$A$2:$A$47,0,1)

    although a quick google suggests it is using exponential smoothing which is a different calculation and hence a different result

    https://www.excelfunctions.net/excel...-function.html

    https://en.wikipedia.org/wiki/Exponential_smoothing

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    Re: Forecast and trend does not yield same result

    It is because you are comparing apples and oranges.

    The TREND function returns the same result as the original FORECAST function. Enter =FORECAST(Table1[@Timeline],$B$2:$B$47,$A$2:$A$47) into H2 and =H2-G2 into I2 formatted as Scientific. Copy H2:I2 into H3:I70. The result is 0.00E+00, exact zero, which indicates identical results.

    You are using the FORECAST.ETS function +/- the FORECAST.ETS.CONFINT function in rows (47 and?) 48:70. I am not familiar with those functions, since they are not available in my version of Excel. But according to Excel support pages, these functions use ``the AAA version of the Exponential Smoothing (ETS) algorithm`` to estimate results, whereas TREND and FORECAST use linear regression.

    So it does not surprise me that they do ``not yield [the] same result``. Whether or not the differences could explain a difference in the slope direction (upward for one; downward for the other), I cannot say. But again, it does not surprise me.


    -----
    PS.... Just reread davsth's response, and I see that mine is virtually identical. Sorry about that. I guess the only value-added of my response is the precise formulas for comparing TREND and FORECAST.
    Last edited by joeu2004; 01-29-2020 at 09:11 PM. Reason: minor improvement

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