2.2 Plotting the series and stationarity

The first and most important step in any time-series analysis is to plot the observations against time. The plot shows the important features of the series, such as trend, seasonality, outliers and sudden changes (discontinuities), and it helps in formulating a sensible model.

Loosely, a series is stationary if it has no systematic change in mean (no trend), no systematic change in variance, and no strictly periodic variation. Most of the theory of later sections is for stationary series, so a common strategy is to remove the trend and seasonal effects first and then model what is left. Stationarity is defined precisely in the next section.

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