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I am going thru this stats course https://onlinecourses.science.psu.edu/stat510/node/48

I can follow all the steps, but have question how the lib figures out what is significant for ACF. See "ACF for Simulated Sample Data", the graph has two blue lines just inside of 0.2 and -0.2. What is the theory for determining these two levels?

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You can compute these confidence intervals by yourself:

significance_level <- qnorm((1 + 0.95)/2)/sqrt(sum(!is.na(indata)))

You only have to change "indata" for the name of your dataset. The theory is that you check for outliers by looking at a normal distribution that you assume your data follows. So having the number of observations you can estimate these Confidence Intervals.

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