I just want to check that I am interpreting the ACF and PACF plots correctly:
The data corresponds to the errors generated between the actual data points and the estimates generated using an AR(1) model.
I've looked at the answer here:
After reading that it seems that the errors are not autocorrelated but I just want to be sure, my concerns are:
1.) The first error is right on the boundary (when this is the case should I accept or reject that there is significant auto-correlation at lag 1)?
2.) The lines represent the 95% confidence interval and given that there are 116 lags I would expect no more than (0.05 * 116 = 5.8 which I round up to 6) 6 lags to be exceed the boundary. For the ACF this is the case but for the PACF there are about 10 exceptions. If you include those on the border it's more like 14? Does this still indicate no auto-correlation?
3.) Should I read anything into the fact that all the breaches of the 95% confidence interval occur to the downside?