# Interpretation of ACF and PACF

First, I am a French student, so forgive me for my English which can be not clear at all.

I have to analyze a financial series. I have some difficulties to make the second part of the work which focuses on ARMA model. I can't read (interpret?) my Autocorrelation Function (ACF) and Partial Autocorrelation Function (PACF) correlogramm.

To my mind, here we have a MA(0) but I don't know if it's possible. In this case, what does it mean ?

And I don't know also with the PACF graph, if we are in a AR(3) or AR(6). And why the first stick is not over the "confidence level" ?

It is possible that my interpretations are false, please tell me.

• What software are you using? – Alecos Papadopoulos Dec 21 '15 at 15:48
• I am using Rstudio – Marc Dec 21 '15 at 21:19

First impression? The process is white noise. What lags appear to exceed the "statistical significance threshold", they nevertheless indicate very small values, never greater than $0.05$. This is truly economically negligible correlation even if it exists (irrespective of whether it is "statistically significant"), and most likely is due to "finite-sample variation", rather than indication of any actual relation.