What Does ARMA Stand For?

ARMA stands for Autoregressive Moving Average Stochastic Model

The Autoregressive Moving Average Stochastic Model (ARMA) is a statistical model used for analyzing and predicting time series data. It combines two components: the autoregressive (AR) part, which models the relationship between an observation and a number of lagged observations, and the moving average (MA) part, which models the relationship between an observation and a residual error from a moving average model applied to lagged observations. ARMA models are widely utilized in various fields, including economics, finance, and engineering, for their effectiveness in capturing temporal dependencies and providing accurate forecasts.