How To Calculate A Sigma Value
A sigma value is a statistical term otherwise known as a standard deviation. Determining the standard deviation of a set of values helps a statistician or researcher determine if the data set is significantly different than a control set. Sigma is a measurement of variability, which is defined by the Investor Words website as "the range of possible outcomes of a given situation."
Step 1
Add a set of data and divide by the number of values in the set to find the mean. For instance, consider the following values: 10, 12, 8, 9, 6. Add them to get a total of 45. Divide 45 by 5 to get a mean of 9.
Step 2
Subtract the mean from each individual value. In this example, you would perform the following operations: 10 – 9 = 1, 12 – 9 = 3, 8 – 9 = -1, 9 – 9 = 0, and 6 – 9 = -3.
Step 3
Square each answer from step two. In this example: 1 x 1 = 1, 3 x 3 = 9, -1 x -1 = 1, 0 x 0 = 0, and -3 x -3 = 9.
Step 4
Add your answers from step three. For this example, add 1, 9, 1, 0, and 9 to get a total of 20.
Step 5
Subtract one from the sample size. The sample size here is 5, so 5 – 1 = 4.
Step 6
Divide the total from step four by your answer from step five. Therefore, you would divide 20 by 4 to get 5.
Step 7
Take the square root of your answer from step six to find the sigma value, or standard deviation. For this example, you would take the square root of 5 to find a sigma value of 2.236.