Proving Covariance for Stationary Stochastic Processes

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Discussion Overview

The discussion revolves around proving the covariance for stationary stochastic processes, specifically addressing the relationship between covariance and variance in the context of independent and weak stationary increments. Participants explore various approaches to establish the covariance formula Cov(Xt, Xs) = min(t, s)σ².

Discussion Character

  • Technical explanation
  • Debate/contested
  • Mathematical reasoning

Main Points Raised

  • One participant questions whether var(Xt) is σ² or σ²*t, suggesting that if it is σ²*t, then the covariance can be expressed using independent and stationary increments.
  • Another participant proposes that Cov(X(t), X(s)) can be derived from the relationship X(t) = X(s) + X(t-s) under the assumption of independence, leading to a variance expression.
  • A participant asserts that independent and stationary increments do not imply that the process is a Poisson process, citing examples like Brownian motion.
  • There is a suggestion that the covariance formula holds only if var(Xt) = tσ², prompting a check for potential typographical errors in the problem statement.
  • Some participants express uncertainty about how to proceed with the proof, indicating that they are unsure of the steps needed to arrive at the desired covariance result.

Areas of Agreement / Disagreement

Participants express differing views on the implications of independent and stationary increments, with some asserting that it leads to a Poisson process while others dispute this claim. There is no consensus on the correct interpretation of variance in relation to covariance, and the discussion remains unresolved regarding the proof of the covariance formula.

Contextual Notes

Participants highlight potential ambiguities in the problem statement, particularly regarding the definition of variance and its implications for covariance. There are also unresolved mathematical steps related to the proof of the covariance relationship.

Kuma
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If a stoch. process Xt has independent and weak stationary increments. var(Xt) = σ^2 for all t, prove that Cov(xt,xs) = min(t,s)σ^2

I'm not sure how to do this. I tried using the definition of covariance but that doesn't really lead me anywhere. If it's stationary that means the distribution doesn't change as time changes. I was thinking of setting s = t+k and showing the covariance being min(t, t+k)var(Xt) but I don't know how to get to there.
 
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is var(xt)=σ^2 or σ^2*t? if it's σ^2*t, then you can say.

cov(xt,xs)=cov(xt-xs+xs,xs) and use independent + stationary increments to prove it.

i'm not sure if it holds true if it's simply σ^2 though...
 
I think that you mean X(t), find Cov(X(t),X(s)). Independent and stationary implies X is a Poisson process. Suppose t>s. Then X(t)=X(s)+X(t-s) and
Cov(X(s)+X(t-s),X(s)) = Var(X(s))+Cov(X(t-s),X(s)) = Var(X(s)) by independence.
If s>t then you find Var(X(t)). Recall that the variance is the rate times the length of the time interval.
 
independent and stationary does NOT imply X is a poisson process.

the opposite is true, but many stochastic processes that are independent and stationary are not necessarily poisson processes (brownian motion, for example has independent and stationary increments).
 
var(xt) =σ^2 for all t. I think μ stays the same for all increments since its a stationary process. But that doesn't really get me anywhere. It's asking to prove that the covariance between increments is the variance x min{s,t}. So if t>s then it would be sσ^2 and vice versa. I really don't know how to get there though.
 
i think given that information, cov(xs,xt)=min(s,t)σ^2 only if var(xt)=tσ^2. i'd double check that the problem isn't a typo or something.
 
Thank you very much jimmypoopins. I could have said if it's a point process then it is Poisson, the context in which this result is usually first seen, but even that isn't necessary to say because the result is more general. Thanks.
 
Kuma,

How did this problem turn out for you? It's a very standard problem assigned but I think you had the problem written wrong. Let us know.
 

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