ITC - KTKBANK Pair Analysis

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End-of-day divergence (Standardized residual) is 1.55.
Half life of pair is 7.59.
Real time (live) divergence is calculating using following formula:
[ktkbank_price - (0.549 * itc_price) - 0.511]/9.79

(where 0.511 is mean error and 9.79 is standard error)
Technical strength of ITC is 1.7. (Support & Resistance)
Technical strength of KTKBANK is 6.0. (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 itc-ktkbank.
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
November 30, 2017 258.25 77104800.0 6332.0 6767.0 258.0
December 28, 2017 259.5 4101600.0 366.0 397.0 258.0
January 25, 2018 260.5 256800.0 6.0 6.0 258.0
Lot size: 2400.0.

KTKBANK Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
November 30, 2017 158.0 23434600.0 1794.0 1900.0 157.25
December 28, 2017 158.8 657400.0 97.0 100.0 157.25
January 25, 2018 159.75 15200.0 2.0 2.0 157.25
Lot size: 3800.0.
Click here for backtesting results.

ITC-KTKBANK Analysis with different time frames and thresholds

Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 124516.459581
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 87701.5135607
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 26735.4993503
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 26566.9757745
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 6433.02358075