Setting a Strong Baseline Forecast
In the previous chapter, we saw some techniques we can use to understand time series data, do some Exploratory Data Analysis (EDA), and so on. But now, let’s get to the crux of the matter – time series forecasting. The point of understanding the dataset and looking at patterns, seasonality, and so on was to make the job of forecasting that series easier. And with any machine learning exercise, one of the first things we need to establish before going further is a baseline.
A baseline is a simple model that provides reasonable results without requiring a lot of time to come up with them. Many people think of baselines as something that is derived from common sense, such as an average or some rule of thumb. But as a best practice, a baseline can be as sophisticated as we want it to be, so long as it is quickly and easily implemented. Any further progress we want to make will be in terms of the performance of this baseline.
In this...
