BAJAJ-AUTO - IRB Pair Analysis

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End-of-day divergence (Standardized residual) is 0.626.
Half life of pair is 14.3.
Real time (live) divergence is calculating using following formula:
[irb_price - (0.0885 * bajaj-auto_price) - 0.0122]/19.1

(where 0.0122 is mean error and 19.1 is standard error)
Technical strength of BAJAJ-AUTO is 4.7. (Support & Resistance)
Technical strength of IRB is 7.3. (Support & Resistance)
Recommendation
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Entry Criterion: Take positions when divergence becomes (+/-)1.5. And exit positions when divergence becomes (+/-)0.0.
Stop Loss: Put your stop loss when divergence becomes more than 2.0 or less than -2.0. We suggest you always use stop losses.
Note: When you trade in futures, keep in mind the expiry date of futures as divergence might not end before expiry date.
Click here to see all recommendations for pair bajaj-auto-irb.
Analyse any other pair:

How to choose pairs?
Choose stocks from same sector/subsector.
Use stock with large market capitalization as first stock.
Here is a list of pairs chosen analytically.

Charts

BAJAJ-AUTO Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
April 26, 2018 2852.0 2189750.0 1762.0 2096.0 2852.15
May 31, 2018 2865.55 253250.0 781.0 957.0 2852.15
Lot size: 250.0.

IRB Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
April 26, 2018 265.15 14212500.0 4520.0 5677.0 264.45
May 31, 2018 266.55 4002500.0 1321.0 2129.0 264.45
Lot size: 2500.0.
Click here for backtesting results.

BAJAJ-AUTO-IRB Analysis with different time frames and thresholds

Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 64109.0162529
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 57799.3987836
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 39372.1831982
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 32988.8370926
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 30617.580735