ITC - BAJFINANCE Pair Analysis

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End-of-day divergence (Standardized residual) is -1.6.
Half life of pair is 1.98.
Real time (live) divergence is calculating using following formula:
[bajfinance_price - (7.09 * itc_price) - 0.00844]/40.6

(where 0.00844 is mean error and 40.6 is standard error)
Technical strength of ITC is 4.0. (Support & Resistance)
Technical strength of BAJFINANCE is 6.1. (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 itc-bajfinance.
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

ITC Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
October 26, 2017 269.8 53534400.0 1066.0 1101.0 269.65
November 30, 2017 271.25 9158400.0 118.0 137.0 269.65
December 28, 2017 273.05 50400.0 2.0 2.0 269.65
Lot size: 2400.0.

BAJFINANCE Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
October 26, 2017 1847.75 5691000.0 1110.0 1225.0 1845.9
November 30, 2017 1859.0 410000.0 125.0 129.0 1845.9
December 28, 2017 1875.1 6000.0 1.0 1.0 1845.9
Lot size: 500.0.
Click here for backtesting results.

ITC-BAJFINANCE Analysis with different time frames and thresholds

Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 46908.4877497
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 40078.9416909
Time Frame 1month, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 13992.8564056