Serial correlation refers to the relationship between consecutive or neighboring data points in a sequence. It shows whether there is a pattern or trend in how the values change over time. For example, if one value is high, the next value is also likely to be high, indicating positive
serial correlation. On the other hand, if one value is high, and the next value is low, it suggests negative
serial correlation. Serial correlation helps us understand the predictability or randomness of data points in a sequence.
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