BANKNIFTY - HDFC Pair Analysis

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End-of-day divergence (Standardized residual) is 0.824.
Half life of pair is 9.91.
Real time (live) divergence is calculating using following formula:
[hdfc_price - (0.0691 * banknifty_price) - -0.169]/49.8

(where -0.169 is mean error and 49.8 is standard error)
Technical strength of BANKNIFTY is 7.3. (Support & Resistance)
Technical strength of HDFC is 7.3. (Support & Resistance)
Recommendation
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Entry Criterion: Take positions when divergence becomes (+/-)2.5. And exit positions when divergence becomes (+/-)0.0.
Stop Loss: Put your stop loss when divergence becomes more than 3.0 or less than -3.0. 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 banknifty-hdfc.
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

BANKNIFTY Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
January 25, 2018 26896.05 2400640.0 72082.0 104809.0 26909.5
February 22, 2018 26931.6 466080.0 9675.0 12508.0 26909.5
March 28, 2018 26973.65 14360.0 169.0 200.0 26909.5
Lot size: 40.0.

HDFC Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
January 25, 2018 1905.8 17014500.0 5788.0 7128.0 1901.25
February 22, 2018 1913.65 2224000.0 1196.0 1922.0 1901.25
March 28, 2018 1909.0 14500.0 5.0 5.0 1901.25
Lot size: 500.0.
Click here for backtesting results.

BANKNIFTY-HDFC Analysis with different time frames and thresholds

Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 73796.0632965
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 73334.9611857
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 61136.2418505
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 61074.0281246
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 59695.1006721