Durbin-Watson Interpretation - Quant Trader Interview Question
Difficulty: Medium
Category: Statistics & Regression
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Topics: statistics, regression, durbin-watson, serial-correlation, autocorrelation
Problem Description
You are analyzing the residuals from a linear regression model used for predicting daily stock returns. The Durbin-Watson statistic is calculated to be approximately 0.5. What can you infer about the presence and nature of serial correlation in the residuals?
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