I have a time series with daily retail sales with two types of missing values
- Stores are closed on Sundays such that there are no observations.
- Stores are closed on public holidays (approx. 10 days per year)
I want to calculate and plot ACF and PACF for this time series. How can I handle the missing observations?
My idea is that dropping the Sundays from the time series is fine as long as one keeps in mind that when interpreting the plot - A peak on lag 6 indicates a weekly seasonality which usually is associated with a peak for lag 7.
What about the other missing values? Simply dropping would result in a wrongly calculated ACF since the lag-order is disturbed.