HDFC - EICHERMOT Pair Analysis

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End-of-day divergence (Standardized residual) is -0.308.
Half life of pair is 2.28.
Real time (live) divergence is calculating using following formula:
[eichermot_price - (18.1 * hdfc_price) - 13.4]/818

(where 13.4 is mean error and 818 is standard error)
Technical strength of HDFC is 4.1. (Support & Resistance)
Technical strength of EICHERMOT is 2.5. (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 hdfc-eichermot.
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

HDFC Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
November 30, 2017 1710.55 10738500.0 9206.0 10874.0 1705.5
December 28, 2017 1718.35 439000.0 334.0 368.0 1705.5
January 25, 2018 1725.6 20000.0 29.0 29.0 1705.5
Lot size: 500.0.

EICHERMOT Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
November 30, 2017 30783.55 174125.0 1142.0 1207.0 30707.45
December 28, 2017 30960.15 5375.0 47.0 48.0 30707.45
Lot size: 25.0.
Click here for backtesting results.

HDFC-EICHERMOT Analysis with different time frames and thresholds

Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 58792.4171718
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 51862.2943358
Time Frame 1month, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 11878.1339791
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 358.661468555