What problem can a Circular Reference cause in data analysis?

A circular reference occurs when there are two or more paths that lead back to the same piece of data within a data model. This scenario can create ambiguity in how data is being aggregated or displayed. When a business intelligence tool like Qlik Sense encounters a circular reference, it may not be clear which path to follow, potentially resulting in incorrect or inconsistent results.

This inconsistency arises because the tool might give priority to one data pathway over another or might create duplicates of some records, leading to inflated or misleading aggregate totals. As a result, any analysis carried out on such a model can yield unreliable insights, hindering decision-making processes.

While some might argue that circular references could simplify the data model or enhance query performance, these claims do not hold up to scrutiny. In fact, circular references are typically detrimental and can complicate data relationships. Furthermore, they do not eliminate the need for joins; instead, they often complicate the data structure, causing a need for more careful planning and management of how relationships and associations are handled.