Mathematics · Probability and Statistics
What is the primary difference between a white noise process and a random walk time series?
- 1White noise always follows a normal distribution, while a random walk can never follow a normal distribution.
- 2White noise has a continuously changing mean, while a random walk has a strictly constant mean.
- 3White noise has no correlation between consecutive observations, while a random walk always has a perfect negative correlation.
- 4White noise is a stationary time series, while a random walk is non-stationary.✓
Correct answer
White noise is a stationary time series, while a random walk is non-stationary.
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