Background Cerebellar ataxia (CA) is a complex motor disorder that exhibits various symptoms such as lack of movement accuracy, delayed motion and ataxic movements associated with gait, extremity and eye. Accurate assessment of ataxic movements forms an integral part, not only in the process of diagnosis, but also to monitor the severity of the neurodegenerative progression, particularly in a rehabilitation context. However, the current assessment schemes are mostly based on the subjective observation of experienced clinicians. Capturing the movement during standard upper limb tests using readily available motion sensors, this paper is intended to amalgamate the sensory information to obtain a more accurate and objective form of assessment. Methods An assessment scheme involving an inertial measurement system and a Kinect system was considered to quantify the degree of ataxia in four instrumented version of upper extremities tests, i.e. Finger Chase (FCT), Finger Tapping (FTT), Finger to Nose (FNT) and Dysdiadochokinesia (DDKT). Kinematic features from these tests were extracted to quantitatively define ataxic signs such as dysmetria, delay in timing, irregularity and instability. Using Feed backward feature elimination (FBE) and Quadratic discrimination analysis (QDA) and Ridge regression (RR), the features were selectively combined to improve the diagnosis and verify the association with clinical assessments by means of Leave-One-Out cross validation. Clinical ratings of the disease status were recorded using the Scale for the Assessment and Rating of Ataxia (SARA). Results We report statistical significance in identifying ataxia from movement features of the four tests. The combined information from the features provided a high accuracy in diagnosing CA subjects (96.4%) in addition to a promising result in predicting the severity of ataxia due to CA (rho=0.8, p<0.001). The severity estimation was also considered in a 4-level scale to provide a rating that is familiar to the current clinically-used rating of upper limb impairments. The combination of FCT and FTT achieve the most acceptable outcome among the considered subsets of the 4 tests. Conclusion The analysis of ataxia can be decomposed primarily into four affected dimensions, i.e. stability, timing, accuracy and rhythmicity. In the context of upper limb tests, the results of accurate classification and prediction of severity attributed mostly to the timing. Furthermore, the underlying approach uncovers the appropriate combination with a reduced number of tests for the assessment of CA utilising the clinical resources more effectively. Trial registration Human Research and Ethics Committee, Royal Victorian Eye and Ear Hospital, East Melbourne, Australia (HREC Reference Number: 11/994H/16).