A method and system for monitoring both an industrial process and a sensor. The method and system include determining a minimum number of sensor pairs needed to test the industrial process as well as the sensor for evaluating the state of operation of both. The technique further includes generating a first and second signal characteristic of an industrial process variable. After obtaining two signals associated with one physical variable, a difference function is obtained by determining the arithmetic difference between the pair of signals over time. A frequency domain transformation is made of the difference function to obtain Fourier modes describing a composite function. A residual function is obtained by subtracting the composite function from the difference function and the residual function (free of nonwhite noise) is analyzed by a statistical probability ratio test.