Matstat Econometrics Matan - page 7
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I know the word 'dependency', but without an explanation about 'x' and 'y' so the picture is irrelevant to the prediction.
PS.
I wish you would realise the word "prediction" yourself.
Suppose that (y) depends on (x)
And you know this reliably.
If (x) changes, what is your prediction for (y)?
Will it change or not?
Are you sure it's up? Maybe downwards? Or left horizontally?
Where is the time there? How does the process evolve over time?
Call the Y-axis time and get how the process evolves over time. Or you can call the X-axis time.
Do you know exactly what the relationship is?
Suppose that (y) depends on (x)
And you know this reliably.
If (x) changes, what is your prediction for (y)?
Will it change or not?
You see the thing is, I didn't give you the Ask and Bid example by accident.
What happens to Ask if Bid changes? You probably can't predict, because Ask has already changed along with Bid and you don't know what will happen to it next.
Do you know exactly what an addiction is?
Do you know exactly what 'prognosis' is?
Do you know exactly what a 'forecast' is?
Of course
Of course
Then why are you talking about "addiction"?
You see the thing is, I didn't accidentally give you the example of Ask and Bid.
What will happen to Ask if Bid changes? You probably can't predict, because Ask has already changed along with Bid, and you don't know what will happen to it next.
And why call Askand Bid? Suppose that the X-axis is time, and the Y-axis is the average price on each trading day. The forecast is an upward trend.
Suppose the X axis is time and the Y axis is the average price on each trading day. The forecast is an upward trend.
These assumptions are irrelevant to that picture.
These assumptions have nothing to do with that picture.
Why is that?
Why is that?
Because it's a pound cake.