DEFINITION of 'Serial Correlation'
The relationship between a given variable and itself over various time intervals. Serial correlations are often found in repeating patterns when the level of a variable effects its future level. In finance, serial correlation is used by technical analysts to determine how well the past price of a security predicts the future price.
The term can also be referred to as "autocorrelation" or "lagged correlation".
INVESTOPEDIA EXPLAINS 'Serial Correlation'
Because technical analysis is based entirely on a stock's price movement and the associated volume, rather than the company's fundamentals, finding and validating profitable patterns is an essential component of the success one will have using such methods.
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RELATED FAQS

What are common examples of Serial Correlation in finance?
Serial correlation, also known as autocorrelation, describes the relationship between observations on the same variable over ... Read Full Answer >> 
What is the variance/covariance matrix or parametric method in Value at Risk (VaR)?
The parametric method, also known as the variancecovariance method, is a risk management technique for calculating the value ... Read Full Answer >> 
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How much variance should an investor have in an indexed fund?
An investor should have as much variance in an indexed fund as he is comfortable with. Variance is the measure of the spread ... Read Full Answer >> 
Can the correlation coefficient be used to measure dependence?
The correlation coefficient can be used to measure the linear dependence between two random variables. The most common correlation ... Read Full Answer >> 
How do you calculate variance in Excel?
To calculate statistical variance in Microsoft Excel, use the builtin Excel function VAR. Given a set of numbers value1 ... Read Full Answer >>
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