CASTROLIND - RELINFRA Pair Analysis

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End-of-day divergence (Standardized residual) is -2.51.
Half life of pair is 10.4.
Real time (live) divergence is calculating using following formula:
[relinfra_price - (1.27 * castrolind_price) - -0.336]/31.6

(where -0.336 is mean error and 31.6 is standard error)
Technical strength of CASTROLIND is 8.3. (Support & Resistance)
Technical strength of RELINFRA is 3.0. (Support & Resistance)
Recommendation
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Entry Criterion: Take positions when divergence becomes (+/-)2.0. 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 castrolind-relinfra.
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

CASTROLIND Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
December 28, 2017 414.55 9682400.0 2361.0 2515.0 416.2
January 25, 2018 415.85 273000.0 57.0 60.0 416.2
Lot size: 1400.0.

RELINFRA Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
December 28, 2017 450.95 8477300.0 3667.0 4147.0 448.85
January 25, 2018 453.5 191100.0 94.0 97.0 448.85
Lot size: 1300.0.
Click here for backtesting results.

CASTROLIND-RELINFRA Analysis with different time frames and thresholds

Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 22219.0182266
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 15926.762739
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 14235.9350946
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 173.798130388