Kindly, I need some help for Monte Carlo model final results

Question

Hi, I'm working on time series future forecasting research using Monte Carlo model which is by 365 Data Science on the following links:1-https://www.youtube.com/watch?v=5Beotog_OiI 2-https://www.youtube.com/watch?v=S11O10uOaos 3-https://www.youtube.com/watch?v=knlDdH1Z-vc
I built my code using Python (Jupiter) and I followed all the steps but I faced some problems that some of my data did not work. The problem was happened only with my daily data such as wind speed data and temperature data. I do not know, If the problem created form the codes or from my CSV files.

Please my historical wind speed data range from (0.41 m/s to 12.7 m/s) please see the attached first image and the Monte Carlo final results show very high range as 2500 m/s which is not right, please see the attached second image. Also the same problem happened with the temperature data.

my historical wind speed data

Monte Carlo final results

Many thanks and sorry for the inconvenience.

Regards,

Answer 1

Hi Fahad! Thanks for reaching out. The strange output can depend on two factors. The first one is the data, as you suggest. Please carefully double-check the data you are feeding the models with. The second one is the model you are using. You say that you have followed the principles shown in the videos, which is great. However, it is crucial what formulas you are going to use to incite a Monte Carlo simulation. And, in this case, since the topic you are using Monte Carlo for is not related to Finance (which is the topic of the videos you've mentioned), I would leave the floor to you regarding the verification of the formulas that you have used. In any case, you should be able to check (and even "play around to understand") which is the reason for obtaining such a graph. Which, by the way, is correct, given the first two factors.
Should you change the data set and/or the formula(s), the graph will definitely change as well. Hope this helps. Best,
Martin

Answer 2

Hello Martin! Thank you for your reply and for the kind help. I used two types of new dataset not related to my research in order to test the code and I got the same error. Which, means there is no problem with my dataset. I will try to build new code that meet my research data requirement. Thank you and sorry for any inconvenience. Best,
Fahad

Answer 3

Hi Fahad! Thank you very much for your reply. Please also check if the mathematical model you are using is applicable for the type of data you are working with. What we show in the videos is applicable when predicting future stock price data. In your case, you might need different models. Hope this helps.
Best,
Martin

Kindly, I need some help for Monte Carlo model final results

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