HDFC - LICHSGFIN Pair Analysis

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End-of-day divergence (Standardized residual) is -0.0194.
Half life of pair is -18.9.
Real time (live) divergence is calculating using following formula:
[lichsgfin_price - (0.382 * hdfc_price) - 0.683]/40.4

(where 0.683 is mean error and 40.4 is standard error)
Technical strength of HDFC is 4. (Support & Resistance)
Technical strength of LICHSGFIN is 6.7. (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 hdfc-lichsgfin.
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
October 26, 2017 1757.55 10750000.0 3471.0 3904.0 1751.55
November 30, 2017 1766.75 2992000.0 1382.0 1579.0 1751.55
Lot size: 500.0.

LICHSGFIN Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
October 26, 2017 669.6 8101500.0 2638.0 2845.0 669.1
November 30, 2017 673.4 251900.0 133.0 142.0 669.1
Lot size: 1100.0.
Click here for backtesting results.

HDFC-LICHSGFIN Analysis with different time frames and thresholds

Time Frame 1year, Entry Threshold 2.5, Stop Loss Threshold 3, Total Profit 40876.9491938
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 40405.6728629
Time Frame 3months, Entry Threshold 2.5, Stop Loss Threshold 3, Total Profit 32329.2975375
Time Frame 1month, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 20831.3984418
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 20298.413719