This graph plots the log residuals in the order of the corresponding observations. The plot is useful when the order of the observations may influence the results, which can occur when data are collected in a time sequence or in some other sequence, such as geographic area.

The residuals in the plot should fluctuate in a random pattern around the center line. Examine the plot to see if any correlation exists between error terms that are near each other. Correlation among residuals may be signified by:

·    An ascending or descending trend in the residuals

·    Rapid changes in signs of adjacent residuals

For the insulation data, the residuals appear to be randomly scattered about zero. No evidence exists that the error terms are correlated with one another.