serial correlation: meaning, definition, pronunciation and examples
C2Technical/Academic
Quick answer
What does “serial correlation” mean?
In statistics and time series analysis, the correlation between a variable's current value and its own past values.
Audio
Pronunciation
Definition
Meaning and Definition
In statistics and time series analysis, the correlation between a variable's current value and its own past values.
The statistical relationship where past observations of a sequence influence subsequent observations, often indicating a pattern, trend, or interdependence within ordered data points (like data collected over time). In econometrics and finance, its presence often violates the assumption of independent errors.
Dialectal Variation
British vs American Usage
Differences
No significant difference in meaning or usage. The term is standard in technical literature in both varieties.
Connotations
Neutral technical term in both varieties.
Frequency
Equally low-frequency outside technical fields in both regions.
Grammar
How to Use “serial correlation” in a Sentence
There is serial correlation in [noun phrase].The model shows serial correlation.To test for serial correlation...Serial correlation was detected.The [errors/data] exhibit serial correlation.Vocabulary
Collocations
Examples
Examples of “serial correlation” in a Sentence
adjective
British English
- The serial-correlation structure was complex.
- A serial-correlation test was applied.
American English
- The serial-correlation problem was addressed.
- We adjusted for serial-correlation effects.
Usage
Meaning in Context
Business
Used in financial analysis, e.g., 'The quarterly sales figures showed strong serial correlation, suggesting a trend.'
Academic
Central to econometrics and time series analysis, e.g., 'The study employed the Breusch-Godfrey test to check for higher-order serial correlation.'
Everyday
Virtually never used in everyday conversation.
Technical
The primary context. Discussed in relation to model diagnostics, forecasting, and stochastic processes.
Vocabulary
Synonyms of “serial correlation”
Vocabulary
Antonyms of “serial correlation”
Watch out
Common Mistakes When Using “serial correlation”
- Using 'serial correlation' to mean correlation between two different series (that is cross-correlation).
- Misspelling as 'cereal correlation'.
- Using it as a verb, e.g., 'The data serial correlates.' (Incorrect).
FAQ
Frequently Asked Questions
In modern usage, especially in time series analysis, they are synonymous. 'Autocorrelation' is more common in engineering and signal processing, while 'serial correlation' is frequent in econometrics, but the distinction is blurry.
Not necessarily. Its presence violates classical regression assumptions, making standard inference unreliable. However, its detection is useful for building better models (like ARIMA) that explicitly account for and model this dependency to improve forecasts.
Statistical independence or randomness (often termed 'white noise'), where knowing past values gives no information about future values.
Typically, no. Serial correlation is a property of data ordered in a sequence, most commonly time. In cross-sectional data (e.g., data on different households at one point in time), spatial correlation is the analogous concept if the data is ordered by location.
In statistics and time series analysis, the correlation between a variable's current value and its own past values.
Serial correlation is usually technical/academic in register.
Serial correlation: in British English it is pronounced /ˈsɪə.ri.əl ˌkɒr.əˈleɪ.ʃən/, and in American English it is pronounced /ˈsɪr.i.əl ˌkɔːr.əˈleɪ.ʃən/. Tap the audio buttons above to hear it.
Learning
Memory Aids
Mnemonic
Think of a SERIAL (like a TV series) where each episode (data point) is CORRELATED with the previous one – what happened last episode influences the next.
Conceptual Metaphor
A DATA GHOST: Past data values haunt or influence present values.
Practice
Quiz
Which of the following is a direct consequence of ignoring serial correlation in a time series regression?