Covariance Stationarity

CFA Level II Quant
#1

Hi,

Can someone please explain covariance stationarity to me in simple terms?

I am having a tought time understanding it.

Thanks.

#2

A time series is covariance stationary if its mean, variance, and covariances with lagged and leading values do not change over time. Covariance stationarity is a requirement for using AR models

#3

The time series is a stable process.