Statistical Analysis

Statistical analysis is the process of collecting and analyzing data in order to discern patterns and
trends. It is a method for removing bias from evaluating data by employing numerical analysis.
This technique is useful for collecting the interpretations of research, developing statistical
models, and planning surveys and studies.

Statistical analysis is a scientific tool in AI and ML that helps collect and analyze large amounts
of data to identify common patterns and trends to convert them into meaningful information. In
simple words, statistical analysis is a data analysis tool that helps draw meaningful conclusions
from raw and unstructured data.

The conclusions are drawn using statistical analysis facilitating decision-making and helping
businesses make future predictions on the basis of past trends. It can be defined as a science of
collecting and analyzing data to identify trends and patterns and presenting them. Statistical
analysis involves working with numbers and is used by businesses and other institutions to make
use of data to derive meaningful information.

Types of Statistical Analysis

Given below are the 6 types of statistical analysis:

• Descriptive Analysis

Descriptive statistical analysis involves collecting, interpreting, analyzing, and summarizing data
to present them in the form of charts, graphs, and tables. Rather than drawing conclusions, it
simply makes the complex data easy to read and understand.

• Inferential Analysis

The inferential statistical analysis focuses on drawing meaningful conclusions on the basis of the
data analyzed. It studies the relationship between different variables or makes predictions for the
whole population.

• Predictive Analysis
Predictive statistical analysis is a type of statistical analysis that analyzes data to derive past
trends and predict future events on the basis of them. It uses machine learning algorithms, data
mining, data modelling, and artificial intelligence to conduct the statistical analysis of data.

• Prescriptive Analysis

The prescriptive analysis conducts the analysis of data and prescribes the best course of action
based on the results. It is a type of statistical analysis that helps you make an informed decision.

• Exploratory Data Analysis

Exploratory analysis is similar to inferential analysis, but the difference is that it involves
exploring the unknown data associations. It analyzes the potential relationships within the data.

• Causal Analysis

The causal statistical analysis focuses on determining the cause and effect relationship between
different variables within the raw data. In simple words, it determines why something happens
and its effect on other variables. This methodology can be used by businesses to determine the
reason for failure.

Importance of Statistical Analysis

Statistical analysis eliminates unnecessary information and catalogs important data in an

uncomplicated manner, making the monumental work of organizing inputs appear so serene.
Once the data has been collected, statistical analysis may be utilized for a variety of purposes.
Some of them are listed below:

• The statistical analysis aids in summarizing enormous amounts of data into clearly digestible
chunks.

• The statistical analysis aids in the effective design of laboratory, field, and survey
investigations.

• Statistical analysis may help with solid and efficient planning in any subject of study.

• Statistical analysis aid in establishing broad generalizations and forecasting how much of
something will occur under particular conditions.
• Statistical methods, which are effective tools for interpreting numerical data, are applied in
practically every field of study. Statistical approaches have been created and are increasingly
applied in physical and biological sciences, such as genetics.

• Statistical approaches are used in the job of a businessman, a manufacturer, and a researcher.
Statistics departments can be found in banks, insurance businesses, and government agencies.

• A modern administrator, whether in the public or commercial sector, relies on statistical data
to make correct decisions.

• Politicians can utilize statistics to support and validate their claims while also explaining the
issues they address.

Benefits of Statistical Analysis

Statistical analysis can be called a boon to mankind and has many benefits for both individuals
and organizations. Given below are some of the reasons why you should consider investing in
statistical analysis:

• It can help you determine the monthly, quarterly, yearly figures of sales profits, and costs
making it easier to make your decisions.

• It can help you make informed and correct decisions.

• It can help you identify the problem or cause of the failure and make corrections. For
example, it can identify the reason for an increase in total costs and help you cut the wasteful
expenses.

• It can help you conduct market analysis and make an effective marketing and sales strategy.

• It helps improve the efficiency of different processes.

Statistical Analysis Process

Given below are the 5 steps to conduct a statistical analysis that you should follow:

• Step 1: Identify and describe the nature of the data that you are supposed to analyze.
• Step 2: The next step is to establish a relation between the data analyzed and the sample
population to which the data belongs.

• Step 3: The third step is to create a model that clearly presents and summarizes the
relationship between the population and the data.

• Step 4: Prove if the model is valid or not.

• Step 5: Use predictive analysis to predict future trends and events likely to happen.

Statistical Analysis Methods

Although there are various methods used to perform data analysis, given below are the 5 most
used and popular methods of statistical analysis:

• Mean

Mean or average mean is one of the most popular methods of statistical analysis. Mean
determines the overall trend of the data and is very simple to calculate. Mean is calculated by
summing the numbers in the data set together and then dividing it by the number of data points.
Despite the ease of calculation and its benefits, it is not advisable to resort to mean as the only
statistical indicator as it can result in inaccurate decision making.

• Standard Deviation

Standard deviation is another very widely used statistical tool or method. It analyzes the
deviation of different data points from the mean of the entire data set. It determines how data of
the data set is spread around the mean. You can use it to decide whether the research outcomes
can be generalized or not.

• Regression

Regression is a statistical tool that helps determine the cause and effect relationship between the
variables. It determines the relationship between a dependent and an independent variable. It is
generally used to predict future trends and events.

• Hypothesis Testing
Hypothesis testing can be used to test the validity or trueness of a conclusion or argument against
a data set. The hypothesis is an assumption made at the beginning of the research and can hold or
be false based on the analysis results.

• Sample Size Determination

Sample size determination or data sampling is a technique used to derive a sample from the
entire population, which is representative of the population. This method is used when the size of
the population is very large. You can choose from among the various data sampling techniques
such as snowball sampling, convenience sampling, and random sampling.

Statistical Analysis Software

Everyone can't perform very complex statistical calculations with accuracy making statistical
analysis a time-consuming and costly process. Statistical software has become a very important
tool for companies to perform their data analysis. The software uses Artificial Intelligence and
Machine Learning to perform complex calculations, identify trends and patterns, and create
charts, graphs, and tables accurately within minutes.

Statistical Analysis Examples

Look at the standard deviation sample calculation given below to understand more about
statistical analysis.

The weights of 5 pizza bases in cms are as follows:

 Particulars (Weight in Square of Mean
Mean Deviation
cms) Deviation

9 9-6.4 = 2.6 (2.6)2 = 6.76

2 2-6.4 = - 4.4 (-4.4)2 = 19.36

5 5-6.4 = - 1.4 (-1.4)2 = 1.96

4 4-6.4 = - 2.4 (-2.4)2 = 5.76

12 12-6.4 = 5.6 (5.6)2 = 31.36

Calculation of Mean = (9+2+5+4+12)/5 = 32/5 = 6.4

Calculation of mean of squared mean deviation = (6.76+19.36+1.96+5.76+31.36)/5 = 13.04

Sample Variance = 13.04

Standard deviation = √13.04 = 3.611

Career in Statistical Analysis

A Statistical Analyst's career path is determined by the industry in which they work. Anyone
interested in becoming a Data Analyst may usually enter the profession and qualify for entry-
level Data Analyst positions right out of high school or a certificate program — potentially with
a Bachelor's degree in statistics, computer science, or mathematics. Some people go into data
analysis from a similar sector such as business, economics, or even the social sciences, usually
by updating their skills mid-career with a statistical analytics course.

Statistical Analyst is also a great way to get started in the normally more complex area of data
science. A Data Scientist is generally a more senior role than a Data Analyst since it is more
strategic in nature and necessitates a more highly developed set of technical abilities, such as
knowledge of multiple statistical tools, programming languages, and predictive analytics models.

Aspiring Data Scientists and Statistical Analysts generally begin their careers by learning a
programming language such as R or SQL. Following that, they must learn how to create
databases, do basic analysis, and make visuals using applications such as Tableau. However, not
every Statistical Analyst will need to know how to do all of these things, but if you want to
advance in your profession, you should be able to do them all.

Based on your industry and the sort of work you do, you may opt to study Python or R, become
an expert at data cleaning, or focus on developing complicated statistical models.

You could also learn a little bit of everything, which might help you take on a leadership role and
advance to the position of Senior Data Analyst. A Senior Statistical Analyst with vast and deep
knowledge might take on a leadership role leading a team of other Statistical Analysts. Statistical
Analysts with extra skill training may be able to advance to Data Scientists or other more senior
data analytics positions.