I'm new to statistics and I'm currently working on some exercises to identify serial correlation visually. This is from a time series exercise of Dollar-Pound Exchange Rate.
After running a simple OLS regression in STATA, i used these commands for the residuals:
predict residuals, res gen residuals_lag = L1.residuals scatter residuals residuals_lag
I'm not sure what conclusion to draw from the second graph. The examples of serial correlation in my text book has a clear pattern and shape, but the example of no serial correlation has a wider random distribution than my output.
My guess is that the graph suggests no serial correlation as the residuals look to be random around 0, with a few outliers. But what do you guys think? Any input is appreciated!