ITC - KTKBANK Pair Analysis

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End-of-day divergence (Standardized residual) is 0.594.
Half life of pair is 8.01.
Real time (live) divergence is calculating using following formula:
[ktkbank_price - (0.543 * itc_price) - 0.295]/9.75

(where 0.295 is mean error and 9.75 is standard error)
Technical strength of ITC is 1.9. (Support & Resistance)
Technical strength of KTKBANK is 5.0. (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
September 28, 2017 268.9 49099200.0 5119.0 5571.0 268.45
October 26, 2017 270.25 7192800.0 1267.0 1595.0 268.45
November 30, 2017 271.8 232800.0 20.0 20.0 268.45
Lot size: 2400.0.

KTKBANK Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
September 28, 2017 151.9 22374400.0 2632.0 2972.0 151.8
October 26, 2017 152.75 3005800.0 648.0 791.0 151.8
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 145219.673407
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 108404.727387
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 40700.9853692
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 39209.1926414
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 26160.4141743