IMF’s world economic outlook report bought forth some interesting charts. The charts in question depicted the probability associated with future data points and highlighting the zones of uncertainty associated with each estimate. You can access the entire report here.
Creating a Chart with Probability Bands around the chart data
Often times there is a bit of uncertainty associated with data points. “Confidence level” is a term often used by statisticians to indicate the probability that the actual values will remain within the a given level.
So let’s start with the data first. A set of analysis tracking a company’s financial performance provide their estimates of the stock price movement. The predictions are tracked over a period of time. At the mid way, we would like to see how the actual stock price has behaved compared to the predictions (most optimistic, most pessimistic). A combination chart, using a combination of an area and a line chart, helps us build a chart similar the first chart in the example above. To be precise, the band does not represent probability in this particular example but in some other situation could as well have served as the “zone of uncertainty”.
Creating a Chart with multiple Probability Bands around the chart data
The second example takes this concept a bit further. It uses a number of bands each representing a range associated with a particular confidence level. This uses multiple area charts as shown below. In order for the bands to overlap properly, you would need to keep in mind the sequence in which the bands are added to the chart.
You can download an example of these probability charts here or click on the button below: