Box-Jenkins Model

The Box-Jenkins Model (also known as ARIMA Autoregressive Integrated Moving Average) was named for its creators George Box and Gwilym Jenkins, who designed this mathematical model to analyze trends and forecast data in 1970.

It forecasts using the three principles of autoregression (p in formula-speak), differencing (d), and moving average (q).

Autoregression tests for stationary data. If the data is not stationary, it would need to be differenced. The moving average is also found. The model is often used to forecast security prices for periods of less than 18 months (considered a short-term investment).

If you're thinking that sounds super dull, you're, uh...not alone. This model wasn't actually very popular with the business community because, well, it took too long and was too complicated. The longer the method was known, though, it gradually won people over, and now it's used in software programs like Forecast Pro.

Granted, the software picks the appropriate model, so people must still be assuming it's too complicated...but it's still in use and has been since 1970, so...that's saying something.