If the above process were completely random, the plot would have a shotgun pattern, and knowledge of a current observation (say Yi-1 = 3) would yield virtually no knowledge about the next observation Yi (it could here be anywhere from -2 to +8). On the other hand, if the process had strong autocorrelation, as seen above, and if Yi-1 = 3, then the range of possible values for Yi is seen to be restricted to a smaller range (2 to 4)--still wide, but an improvement nonetheless (relative to -2 to +8) in predictive power.