CIPLA - TATAMTRDVR Pair Analysis

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End-of-day divergence (Standardized residual) is -2.65.
Half life of pair is 7.2.
Real time (live) divergence is calculating using following formula:
[tatamtrdvr_price - (0.491 * cipla_price) - 0.629]/22.3

(where 0.629 is mean error and 22.3 is standard error)
Technical strength of CIPLA is 7.0. (Support & Resistance)
Technical strength of TATAMTRDVR is 2.9. (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 2.5 or less than -2.5. 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 cipla-tatamtrdvr.
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

CIPLA Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
August 31, 2017 592.6 7431000.0 4345.0 4881.0 590.45
September 28, 2017 595.0 79000.0 40.0 46.0 590.45
Lot size: 1000.0.

TATAMTRDVR Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
August 31, 2017 232.0 19454400.0 2191.0 2370.0 231.6
September 28, 2017 233.3 875700.0 188.0 228.0 231.6
October 26, 2017 236.25 6300.0 2.0 2.0 231.6
Lot size: 2100.0.
Click here for backtesting results.

CIPLA-TATAMTRDVR Analysis with different time frames and thresholds

Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 69359.996214
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 63315.821242
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 23084.3814261
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 16929.5263594
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 10797.2915187