Dickey-Fuller Test

The Dickey-Fuller test is a statistical method used to determine whether a time series data, like stock prices or economic indicators, is stable over time or has a tendency to drift or trend. Specifically, it checks if the data is "stationary" (meaning its properties like mean and variance do not change over time) or if it shows a pattern of persistent change. This helps analysts understand if the data is suitable for certain models or if it needs to be transformed before making predictions. Essentially, it assesses the presence of a consistent pattern or trend in the data.