give an example of auto-correlation
Answers
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In order to understand autocorrelation, we can discuss some instances that are based upon cross sectional and time series data. In cross sectional data, if the change in the income of a person A affects the savings of person B (a person other than person A), then autocorrelation is present. In the case of time series data, if the observations show inter-correlation, specifically in those cases where the time intervals are small, then these inter-correlations are given the term of autocorrelation.
In time series data, autocorrelation is defined as the delayed correlation of a given series. Autocorrelation is a delayed correlation by itself, and is delayed by some specific number of time units. On the other hand, serial autocorrelation is that type which defines the lag correlation between the two series in time series data.