How Good Can Linear Models Be for Time-Series Forecasting?

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Summary

This paper demonstrates that careful preprocessing—especially context length selection, normalization, and regularization—can make simple linear models like Ridge regression competitive with or superior to large Transformer, MLP, and CNN models on time-series forecasting benchmarks.

Time-series forecasting research has been moving steadily toward larger architectures, from specialized transformers to general-purpose foundation models, on the assumption that capacity is what unlocks accuracy. We take the opposite position: most of the gap can be closed at far lower cost by tuning preprocessing rather than scaling models. We use Ridge regression as the testbed, since it has a closed-form solution and interpretable weights, which let the optimal hyperparameters be read off the search directly. We search over context length, local normalization, regularization, and augmentation on eight standard benchmarks and find three patterns. (1) Optimal lookback is strongly series-specific and often non-monotonic in forecast horizon, with fitted power-law exponents ranging from +0.46 on ETTm2 to -0.19 on Exchange and Traffic, challenging the convention that longer horizons need longer history. (2) Normalizing over a learned trailing fraction of the context, rather than its entirety, is almost universally preferred. (3) Series within the same dataset often disagree on hyperparameters; the optimal degree of cross-series sharing varies from fully shared to fully per-series. The resulting models beat prior linear forecasters on most dataset-horizon entries and exceed Transformer, MLP, and CNN baselines on six of eight benchmarks. The optimized hyperparameters also serve as a diagnostic on the data itself, revealing structures that larger models absorb silently into their learned parameters.
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Source: https://huggingface.co/papers/2606.27282

Abstract

Research demonstrates that preprocessing optimizations, particularly in context length, normalization, and regularization, can significantly improve time-series forecasting accuracy more effectively than scaling model architectures.

Time-series forecastingresearch has been moving steadily toward larger architectures, from specializedtransformersto general-purposefoundation models, on the assumption that capacity is what unlocks accuracy. We take the opposite position: most of the gap can be closed at far lower cost by tuning preprocessing rather than scaling models. We useRidge regressionas the testbed, since it has a closed-form solution and interpretable weights, which let the optimalhyperparametersbe read off the search directly. We search overcontext length,local normalization,regularization, andaugmentationon eight standard benchmarks and find three patterns. (1) Optimal lookback is strongly series-specific and often non-monotonic inforecast horizon, with fitted power-law exponents ranging from +0.46 on ETTm2 to -0.19 on Exchange and Traffic, challenging the convention that longer horizons need longer history. (2) Normalizing over a learned trailing fraction of the context, rather than its entirety, is almost universally preferred. (3) Series within the same dataset often disagree onhyperparameters; the optimal degree ofcross-series sharingvaries from fully shared to fully per-series. The resulting models beat prior linear forecasters on most dataset-horizon entries and exceed Transformer, MLP, and CNN baselines on six of eight benchmarks. The optimizedhyperparametersalso serve as a diagnostic on the data itself, revealing structures that larger models absorb silently into their learned parameters.

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