title: Python ARIMA output - interpreting Sigma2
body: <p>I am trying to interpret ARIMA output below and not clear about <strong>sigma2</strong>. The documentation says it is 'The variance of the residuals.'. What is the hypothesis behind this output/importance?. </p>
  
  <p>Kindly provide answer or a link where it is covered in detail.</p>
  
  <pre><code>import statsmodels.api as sm
  mod = sm.tsa.statespace.SARIMAX(df.Sales, order=(0, 1, 1), 
  seasonal_order=(0, 1, 1, 12), enforce_stationarity=False,
                              enforce_invertibility=False)
  results = mod.fit()
  print(results.summary().tables[1])
  
  
  
     ==============================================================================
                       coef    std err          z      P&gt;|z|      [0.025      0.975]
      ------------------------------------------------------------------------------
      ma.L1         -0.9317      0.055    -16.989      0.000      -1.039      -0.824
      ma.S.L12      -0.0851      0.143     -0.594      0.553      -0.366       0.196
      sigma2      1.185e+09   2.13e-11   5.56e+19      0.000    1.19e+09    1.19e+09
      ==============================================================================
  </code></pre>