With a simple moving average, what is the primary purpose of calculating average values over a selected period?

Calculating average values over a selected period using a simple moving average primarily serves the purpose of smoothing out fluctuations in the dataset. By taking the average of a set number of data points, the simple moving average helps reduce the impact of random variations and noise, allowing observers to see the underlying trends more clearly. It effectively highlights long-term trends by filtering out short-term volatility, which is particularly useful in time series data analysis.

While identifying trends and predicting future values are important outcomes of using average values, the primary function of creating a moving average is to smooth skewed data, leading to more reliable and clearer insights. This smoothed line can make it easier to visualize trends over time, allowing for more informed interpretations and decisions based on the data. Calculating averages also does not provide a specific data point as seen in raw readings; rather, it represents a composite picture of the data over the specified period.