Fair, I had to click into the full size (I pinch zoomed on my phone). But now the fact that 1988/1989 are outliers raise a few more questions about the variance calculation. In particular, the title suggests that those weren't included in the variance calculation.
A 3.5-sigma event is a 1-in-1000 chance. Yet we have 2 of them in our data set that goes back only 40ish years? Something is suspect. Maybe I'm not accounting for the likelihood of a random walk excursion probability, but if a 3.5 sigma event isn't a 1-in-1000 event I have difficulty interpreting.
A 3.5-sigma event is a 1-in-1000 chance. Yet we have 2 of them in our data set that goes back only 40ish years? Something is suspect. Maybe I'm not accounting for the likelihood of a random walk excursion probability, but if a 3.5 sigma event isn't a 1-in-1000 event I have difficulty interpreting.