How to Calculate a Sigma Value

How to Calculate a Sigma Value
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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 to 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."

    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.

    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 6 - 9 = -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 -3 x -3 = 9

    Add your answers from step three. For this example, add 1, 9, 1, 0 and 9 to get a total of 20.

    Subtract one from the sample size. The sample size here is 5, so 5 - 1 = 4.

    Divide the total from step four by your answer from Step 5. Therefore, you would divide 20 by 4 to get 5.

    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.

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