Lagging Indicators are an integral part of all kinds of forecasting methods. They give you insights into what is happening and what has already happened in the past, which can help you accurately predict future outcomes.But how do they work? Well, let's say that we want to know whether a new product will be successful in the market or not. We'll look at its sales data over a period of time, and if it lags behind other products on the same shelf, then we know that it comes with some kind of disadvantage. This is because lagging indicators are not accurate when it comes to predicting things like volume or trends (for example, low sales might indicate that there's a problem with your marketing). But they can tell you something about your competitors' strategy and mindset as well as their current position in the market.When the market is fluctuating, a lot of times it's not very clear what is causing the change. So, you have to either wait for the trend to clear or look at other factors that might be affecting it. One such factor could be a lagging indicator. Lagging indicators are basically observable or measurable factors that change after the changing economy, financial, or business variable with which they are correlated changes.For example, if stock prices are rising steadily and then suddenly start falling again by 20%, you can consider this as a lagging indicator because now we know that something happened before stock prices started falling (whether it was competition from another brand or some new technological breakthrough).
