NIFTY - CASTROLIND Pair Analysis

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End-of-day divergence (Standardized residual) is 0.329.
Half life of pair is 3.21.
Real time (live) divergence is calculating using following formula:
[castrolind_price - (0.0468 * nifty_price) - 0.0443]/7.82

(where 0.0443 is mean error and 7.82 is standard error)
Technical strength of NIFTY is 8.1. (Support & Resistance)
Technical strength of CASTROLIND is 7.7. (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 nifty-castrolind.
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

NIFTY Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
May 25, 2017 9333.7 19293300.0 54135.0 98148.0 9304.05
June 29, 2017 9330.9 1168500.0 1912.0 2288.0 9304.05
July 27, 2017 9339.7 5625.0 93.0 120.0 9304.05
Lot size: 75.0.

CASTROLIND Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
May 25, 2017 436.8 9037000.0 1428.0 1518.0 438.0
June 29, 2017 445.0 2800.0 1.0 1.0 438.0
Lot size: 1400.0.
Click here for backtesting results.

NIFTY-CASTROLIND Analysis with different time frames and thresholds

Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 40652.9170394
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 33839.5202108
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 33119.6715844
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 29993.3335367
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 19589.9196146