Definition of Serial correlation:
Non-random pattern unexplained by an analysis (such as a time series analysis) and indicating that an important variable remains unidentified. Statistical techniques such as Durbin Watson coefficient are used in detection of this undesirable correlation.
Serial correlation is also known as autocorrelation or lagged correlation.
Serial correlation is the relationship between a variable and a lagged version of itself over various time intervals. Repeating patterns often show serial correlation when the level of a variable affects its future level. In finance, this correlation is used by technical analysts to determine how well the past price of a security predicts the future price.
How to use Serial correlation in a sentence?
- A variable that is serially correlated has a pattern and is not random.
- Technical analysts validate the profitable patterns of a security or group of securities and determine the risk associated with investment opportunities.
- Serial correlation is the relationship between a given variable and a lagged version of itself over various time intervals.
Meaning of Serial correlation & Serial correlation Definition