Procedure
Visual/graphical analysis is the simplest way to check stationarity.
Step 1: Plot Time Series
Create a time series plot of vs
Step 2: Examine Mean
Look for:
- Constant horizontal band around zero → stationary mean possible
- Upward/downward trend → non-stationary mean
Step 3: Examine Variance
Look for:
- Constant spread over time → stationary variance possible
- Increasing/decreasing spread → non-stationary variance
Step 4: Check for Seasonality
Look for:
- Regular patterns at fixed intervals → seasonal component present
Subjective
Visual analysis is subjective. Always confirm with formal tests (ADF, Ljung-Box).
Decision
| Observation | Assessment |
|---|---|
| Constant mean & variance | Possibly stationary → confirm with tests |
| Trend present | Non-stationary → consider differencing |
| Changing variance | Non-stationary → consider transformation |
| Regular patterns | Seasonal → consider seasonal model |