ITC - KTKBANK Pair Analysis

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End-of-day divergence (Standardized residual) is 0.0361.
Half life of pair is 21.8.
Real time (live) divergence is calculating using following formula:
[ktkbank_price - (0.524 * itc_price) - -0.127]/13.8

(where -0.127 is mean error and 13.8 is standard error)
Technical strength of ITC is 4. (Support & Resistance)
Technical strength of KTKBANK is 3.5. (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 2.5 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
July 27, 2017 288.55 16440000.0 9897.0 12493.0 288.55
August 31, 2017 290.6 41452800.0 12439.0 15187.0 288.55
September 28, 2017 292.8 348000.0 76.0 77.0 288.55
Lot size: 2400.0.

KTKBANK Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
July 27, 2017 151.7 4810800.0 3582.0 4614.0 151.7
August 31, 2017 152.85 26394800.0 4367.0 5621.0 151.7
September 28, 2017 153.9 129200.0 63.0 67.0 151.7
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 117545.147109
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 80730.2010895
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 40615.9016836
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 27567.1232166
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 18194.6806359