Polynomial Trending

Polynomial Trending
A type of trend that represents a large set of data with many fluctuations. As more data becomes available, trends often become less linear and a polynomial trend takes its place. Graphs with curved trendlines are generally used to show a polynomial trend.

For example, polynomial trending would be apparent on the graph that shows the relationship between the profit of a new product and the number of years the product has been available. The trend would likely rise near the beginning of the graph, peak in the middle and then trend downward near the end. If the company revamps the product late in its life cycle we'd expect to see this trend repeat itself. This type of chart, which would have several waves on the graph, would be deemed to be a polynomial trend.


Investment dictionary. . 2012.

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