Differencing is a technique used in time series analysis to transform a non-stationary series into a stationary one by subtracting the previous observation from the current observation. This method is essential for making the data suitable for modeling, particularly with autoregressive integrated moving average (ARIMA) models, as it helps stabilize the mean of the series and remove trends. In time series data manipulation, differencing allows for a clearer interpretation of the underlying patterns and improves the performance of various forecasting methods.
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